{
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  "name": "TOMMY HIGGINS, Employee, Plaintiff v. MICHAEL POWELL BUILDERS, Employer, and KEY BENEFIT SERVICES, Carrier, Defendants",
  "name_abbreviation": "Higgins v. Michael Powell Builders",
  "decision_date": "1999-04-06",
  "docket_number": "No. COA98-812",
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    "judges": [
      "Judges TIMMONS-GOODSON and HUNTER concur."
    ],
    "parties": [
      "TOMMY HIGGINS, Employee, Plaintiff v. MICHAEL POWELL BUILDERS, Employer, and KEY BENEFIT SERVICES, Carrier, Defendants"
    ],
    "opinions": [
      {
        "text": "MARTIN, Judge.\nDefendant Key Benefit Services (Key Benefit), the servicing agent for the North Carolina Mutual Employer Self-Insured Workers\u2019 Compensation Fund, appeals from an opinion and award of the Full Commission awarding plaintiff continuing total disability benefits for an injury sustained by plaintiff on 16 September 1996, when plaintiff fell out of a window while working for defendant Michael W. Powell Builders, Inc. (Powell Builders). Powell Builders was self-insured for workers\u2019 compensation purposes through the North Carolina Mutual Employer Self-Insured Workers\u2019 Compensation Fund.\nPowell Builders prepared an I.C. Form 19, Employer\u2019s Report of Injury to Employee and forwarded it to Key Benefits. The Form 19 indicated in some places that plaintiff had been employed for 2 and one-half years as a carpenter; in another place the form indicated plaintiff\u2019s occupation was \u201cframer-subcontractor.\u201d After receiving the report of plaintiff\u2019s injury from Powell Builders, Key Benefit initiated compensation payments pursuant to the provisions of G.S. \u00a7 97-18(d), without prejudice and without accepting liability, and filed an I.C Form 63, Notice to Employee of Payment of Compensation Without Prejudice, providing copies to plaintiff and to Powell Builders. The Form 63 indicated that plaintiff was an employee of Powell Builders.\nKey Benefits continued to pay compensation to plaintiff until sometime in January when it received information from Powell Builders\u2019 attorney that, in his opinion, plaintiff was not an employee of Powell Builders but was, instead, a subcontractor. Key Benefits immediately discontinued payments, and plaintiff filed his claim and requested that it be assigned for hearing. On 24 February 1997, Key Benefit filed an I.C. Form 61, denying plaintiff\u2019s claim on the ground plaintiff was not an employee of Powell Builders.\nThe deputy commissioner awarded plaintiff benefits, determining that defendants\u2019 failure to contest the claim within the period for payment without prejudice provided by G.S. \u00a7 97-18(d) constituted an award of the Industrial Commission pursuant to G.S. \u00a7 97-82(b), that plaintiff\u2019s employment status was known or reasonably should have been known prior to the expiration of the statutory period had the servicing agent made any investigation thereof, that there was no excusable neglect on defendants\u2019 part, and that the reward was not subject to being set aside as a mutual mistake.\nDefendants appealed to the Full Commission, which adopted, with minor modifications, the deputy commissioner\u2019s findings and conclusions and affirmed the award.\nBy the arguments brought forward in support of its assignments of error, Key Benefit contends the Commission erred when: (1) it determined that plaintiff\u2019s employment status could have been reasonably discovered before the expiration of the statutory period for contesting the claim; (2) it refused to grant relief from the binding effect of the Form 63 on the grounds that plaintiffs employment status was newly discovered evidence; (3) it refused to grant such relief on the grounds of excusable neglect; and (4) it refused to set aside the award on the grounds of misrepresentation or mutual mistake. For the following reasons, we affirm the Commission\u2019s opinion and award.\nI.\n\u201cThe standard of appellate review of an opinion and award of the Industrial Commission is limited to whether there was any competent evidence before the Commission to support its findings of fact and whether the findings of fact justify the Commission\u2019s legal conclusions and decision.\u201d Harris v. North American Products, 125 N.C. App. 349, 352, 481 S.E.2d 321, 323 (1997); Pittman v. Thomas & Howard, 122 N.C. App. 124, 129, 468 S.E.2d 283, 285-86, disc. review denied, 343 N.C. 513, 472 S.E.2d 18 (1996) (citations omitted). \u201cThe Commission\u2019s findings \u2018will not be disturbed on appeal if supported by any competent evidence even if there is evidence in the record which would support a contrary finding.\u2019 \u201d Harris at 352, 481 S.E.2d at 323 (quoting Peoples v. Cone Mills Corp., 316 N.C. 426, 432, 342 S.E.2d 798, 803 (1986)). The Commission, and not this Court, is \u201cthe sole judge of the credibility of witnesses\u201d and the weight given to their testimony. Pittman at 129, 468 S.E.2d at 286 (quoting Russell v. Lowes Product Distribution, 108 N.C. App. 762, 765, 425 S.E.2d 454, 457 (1993)).\nII.\nFirst, Key Benefit argues the Commission erred in its determination that defendants are not entitled to contest the compensability of plaintiff\u2019s claim after the expiration of the statutory period provided by G.S. \u00a7 97-18(d). Key Benefit takes issue with the Commission\u2019s findings and conclusion that plaintiff\u2019s employment status was known to Powell Builders, and could have been reasonably discovered by Key Benefit had it conducted a diligent investigation, within the time period for contesting the claim.\nUnder the statutory scheme provided by G.S. \u00a7 97-18(d), in those cases in which an employer or insurer is uncertain about the com-pensability of a claim, the employer or insurer may commence payment of compensation without admitting liability and without prejudice to its rights to contest the claim. The employer or insurer is required to file the prescribed form, I.C. Form 63, stating that the payments are made without prejudice, and that such payments continue until the claim is either accepted or contested or until 90 days from the date upon which the employer first obtains written or actual notice of the injury. If, during the 90 day period, which may be extended by the Commission for an additional 30 days upon application, the employer or insurer contests compensability, it may cease payment upon giving the proper notice specifying the grounds upon which liability is contested. However, if the employer or insurer does not contest compensability of the claim or its liability therefor within the statutory period, it waives its right to do so and the entitlement to compensation becomes an award of the Commission pursuant to G.S. \u00a7 97-82(b). In such event, after the expiration of the 90 day period, the employer or insurer may cease payments and contest compensability only upon showing that material evidence became available after the expiration of the statutory period which could not have reasonably been discovered earlier. N.C. Gen. Stat. \u00a7 97-18(d) (1997).\nHere, defendant employer, Powell Builders, had actual notice of plaintiffs injury on the date it occurred; the statutory period for contesting the claim expired 16 December 1996, no application for an extension having been made, and neither Powell Builders nor Key Benefit gave notice that the compensability of plaintiffs claim was being contested. Key Benefit argues, however, that it is still entitled to contest the compensability of plaintiffs claim because material information concerning plaintiffs employment status was not discovered, and was not reasonably discoverable, until after the expiration of the statutory period.\nWe hold there is competent evidence in the record to support the Commission\u2019s finding that plaintiffs employment status was \u201cat all times reasonably discoverable\u201d by both the employer and the carrier. The testimony of Powell Builders\u2019 owner, Michael Powell, showed that Powell Builders became aware of plaintiff\u2019s injury on the day it occurred and filed I.C. Form 19, the employer\u2019s report of the injury. Line 28 of the injury report listed plaintiff as a \u201cframer-subcontractor.\u201d Mr. Powell testified that he spoke with Key Benefit\u2019s claims director, Jeff Millett, and that Powell Builders\u2019 other employees were available to provide information concerning plaintiff\u2019s injury and employment status. Mr. Millett never inquired about plaintiff\u2019s status as a \u201cframer-subcontractor,\u201d even though he discussed plaintiff\u2019s medical bills with Powell Builders\u2019 office manager. Mr. Millett also testified, admitting that he did not inquire whether plaintiff was an employee or whether plaintiff was paid via an independent contractor Form 1099. When asked whether the information was reasonably available, Mr. Millett replied \u201cI don\u2019t know if it was reasonably available because I didn\u2019t ask, so how would I know.\u201d\nNoting that \u201cdefendant-employer had actual knowledge of the plaintiff\u2019s employment status equal to that of the plaintiff,\u201d the Commission correctly concluded that Key Benefit could have discovered plaintiff\u2019s employment status \u201chad it made a reasonable investigation of the claim.\u201d Having failed to reasonably investigate the claim, Key Benefit cannot now assert that the information was not reasonably available. Pursuant to the provisions of G.S. \u00a7 97-18(d), defendants have waived their right to contest the com-pensability of plaintiff\u2019s injuries, and the award of compensation has become final as provided by G.S. \u00a7 97-82(b).\nIII.\nKey Benefit next argues that it is entitled to relief from the award of compensation made final by G.S. \u00a7 97-82(b). Analogizing the award to a judgment in a civil case, Key Benefit asserts three grounds for affording it relief: (1) newly discovered evidence, (2) excusable neglect, and (3) mutual mistake or misrepresentation.\nA.\nFirst, Key Benefit argues the evidence with respect to plaintiff\u2019s employment status was \u201cnewly discovered evidence.\u201d The standard for providing relief on the grounds of newly discovered evidence, as applied in the context of the Workers\u2019 Compensation Act, requires that the evidence be new, i.e., available only after the initial hearing, Andrews v. Fulcher Tire Sales and Service, 120 N.C. App. 602, 463 S.E.2d 425 (1995), and that the party seeking relief \u201cshow that when the award was entered evidence material to the case existed that he did not learn about, through due diligence, until later.\u201d Wall v. N.C. Dept. of Human Resources: Div. of Youth Services, 99 N.C. App. 330, 332, 393 S.E.2d 109, 110 (1990), disc. review denied, 328 N.C. 98, 402 S.E.2d 430 (1991).\nAs discussed above, competent evidence of record supports the Commission\u2019s findings that plaintiff\u2019s employment status was \u201creasonably available at all times\u201d and that Key Benefit did not exercise due diligence in its investigation of the matter during the statutory period. Key Benefit is not entitled to relief on the grounds of newly discovered evidence.\nB.\nNext, Key Benefit suggests the award should be set aside on the grounds of excusable neglect, as permitted by G.S. \u00a7 1A-1, Rule 60(b). Whether a litigant\u2019s actions constitute excusable neglect is a question of law, reviewed on appeal based upon the facts as found below. Thomas M. McInnis & Associates, Inc. v. Hall, 318 N.C. 421, 425, 349 S.E.2d 552, 554-55 (1986). \u201cTo set aside a judgment on the grounds of excusable neglect under Rule 60(b), the moving party must show that the judgment rendered against him was due to his excusable neglect and that he has a meritorious defense.\u201d Id. at 424, 349 S.E.2d at 554.\nWhile there is no clear dividing line as to what falls within the confines of excusable neglect as grounds for the setting aside of a judgment, what constitutes excusable neglect depends upon what, under all the surrounding circumstances, may be reasonably expected of a party in paying proper attention to his case. Excusable neglect must have occurred at or before entry of judgment and must be the cause of the default judgment being entered.\nId. at 425, 349 S.E.2d at 554-55 (citations omitted). Based upon the Commission\u2019s findings of fact, plaintiff\u2019s status as a \u201cframer-subcontractor\u201d in the employer\u2019s report of injury should have prompted a reasonable investigation by Key Benefit; its failure to investigate plaintiff\u2019s status fell short of the diligence \u201creasonably expected of a party in paying proper attention to his case.\u201d The Commission did not err in refusing to grant Key Benefit relief based upon excusable neglect.\nC.\nFinally, defendant contends that the Industrial Commission should have set aside the award on the grounds of mutual mistake, misrepresentation, or fraud. The Industrial Commission \u201cpossesses such judicial power as is necessary to administer the Worker\u2019s Compensation Act\u201d and has the \u201cpower to set aside a former judgment on the grounds of mutual mistake, misrepresentation, or fraud.\u201d Hogan v. Cone Mills Corp., 315 N.C. 127, 138, 337 S.E.2d 477, 483 (1985). Because the doctrines of mutual mistake, misrepresentation, and fraud generally apply to agreements between parties, these doctrines will not provide grounds to set aside an award not based upon such an agreement. McAninch v. Buncombe County Schools, 347 N.C. 126, 132, 489 S.E.2d 375, 379 (1997) (\u201cThus, where there is no finding that the agreement itself was obtained by fraud, misrepresentation, mutual mistake, or undue influence, the Full Commission may not set aside the agreement, once approved.\u2019)); Brookover v. Borden, Inc., 100 N.C. App. 754, 755-56, 398 S.E.2d 604, 606 (1990), disc. review denied, 328 N.C. 270, 400 S.E.2d 450 (1991); Neal v. Clary, 259 N.C. 163, 130 S.E.2d 39 (1963). G.S. \u00a7 97-17 expressly provides that:\n[N]o party to any agreement for compensation approved by the Industrial Commission shall thereafter be heard to deny the truth of the matters therein set forth, unless it shall be made to appear to the satisfaction of the Commission that there has been error due to fraud, misrepresentation, undue influence or mutual mistake, in which event the Industrial Commission may set aside such agreement.\nN.C. Gen. Stat. \u00a7 97-17 (1997) (emphasis added); see also N.C. Gen. Stat. \u00a7 97-87 (1997) (Filing agreements approved by Commission or awards; judgment in accordance therewith; discharge or restoration of lien). Limitation of these doctrines to agreements, in this context, reenforces the doctrinal basis of these doctrines, i.e., that when there has been a mutual mistake, misrepresentation, or fraud, no enforceable agreement exists because a meaningful \u2018meeting of the minds\u2019 is lacking. Creech v. Melnik, 347 N.C. 520, 527, 495 S.E.2d 907, 911-12 (1998) (\u201cIt is essential to the formation of any contract that there be \u2018mutual assent of both parties to the terms of the agreement so as to establish a meeting of the minds.\u2019 \u201d). Agreements formed under these circumstances lack the requisite mutuality to become legally binding.\nHere, the basis of the award is not an agreement, hence, there was no need for a \u201cmeeting of the minds.\u201d The Commission\u2019s award does not adopt an agreement between the parties; rather, the award derives from defendant\u2019s unilateral initiation of payment of compensation and subsequent failure to contest the claim under G.S. \u00a7 97-18(d). Therefore, the doctrines of mutual mistake, misrepresentation, and fraud do not operate to afford Key Benefit relief from the award.\nEven if these doctrines were applicable, competent evidence supports the Commission\u2019s findings and its conclusion that defendant\u2019s mistake was\na unilateral decision of defendant\u2019s servicing agent, who knew or should have known of plaintiff\u2019s actual employment status prior to the entry of the same award. Plaintiff did not say or do anything to induce defendant to enter the disputed award; rather, plaintiff was merely the beneficiary of defendant\u2019s unilateral action.\nUnder these circumstances, the Commission correctly refused to set aside the award on the grounds of mutual mistake, misrepresentation or fraud.\nAffirmed.\nJudges TIMMONS-GOODSON and HUNTER concur.",
        "type": "majority",
        "author": "MARTIN, Judge."
      }
    ],
    "attorneys": [
      "Michaels Jones Martin Parris & Tessener, PLLC, by James S. Walker, for plaintiff-appellee.",
      "Orbock Bowden Ruark & Dillard, PC, by Barbara E. Ruark, for defendant-appellant Key Benefit Services."
    ],
    "corrections": "",
    "head_matter": "TOMMY HIGGINS, Employee, Plaintiff v. MICHAEL POWELL BUILDERS, Employer, and KEY BENEFIT SERVICES, Carrier, Defendants\nNo. COA98-812\n(Filed 6 April 1999)\n1. Workers\u2019 Compensation\u2014 period for contesting compens-ability \u2014 material information reasonably discoverable\u2014 award final\nThe Industrial Commission did not err in a workers\u2019 compensation action in its determination that defendants were not entitled to contest the compensability of plaintiff\u2019s claim after the expiration of the statutory period provided by N.C.G.S. \u00a7 97-18(d) where defendant employer had actual notice of plaintiff\u2019s injury on the date it occurred, the statutory period for contesting the claim expired with no application for an extension having been made, and neither defendant-employer nor the carrier gave notice that the compensability of plaintiff\u2019s claim was being contested. There is competent evidence in the record to support the finding that plaintiff\u2019s employment status was at all times reasonably discoverable by both the employer and the carrier and the award has become final as provided by N.C.G.S. \u00a7 97-82(b).\n2. Workers\u2019 Compensation\u2014 employment status \u2014 newly discovered evidence\nA workers\u2019 compensation carrier was not entitled to relief from an award of compensation based on newly discovered evidence concerning plaintiff\u2019s employment status where competent evidence supports the Commission\u2019s findings that plaintiff\u2019s employment status was reasonably available at all times and that the carrier did not exercise due diligence in its investigation of the matter during the statutory period.\n3. Workers\u2019 Compensation\u2014 compensability \u2014 employment status \u2014 excusable neglect by carrier\nThe Industrial Commission did not err by refusing to grant a carrier relief from an award based upon excusable neglect where plaintiffs status as a subcontractor should have prompted a reasonable investigation by the carrier. The failure of the carrier to investigate plaintiff\u2019s status fell short of the diligence reasonably expected of a party paying proper attention to his case.\n4. Workers\u2019 Compensation\u2014 compensability \u2014 not contested \u2014 mutual mistake, misrepresentation or fraud\nThe Industrial Commission correctly refused to set aside a workers\u2019 compensation award on the grounds of mutual mistake, misrepresentation or fraud concerning plaintiff\u2019s status as an employee or subcontractor where the award derived from defendant carrier\u2019s unilateral initiation of payment of compensation and subsequent failure to contest the claim under N.C.G.S. \u00a7 97-18(d). The basis of the award was not an agreement and the doctrines of mutual mistake, misrepresentation, and fraud do not operate to afford the carrier relief. Moreover, even if these doctrines were applicable, competent evidence supports the Commission\u2019s findings and conclusions.\nAppeal by defendant Key Benefit Services from opinion and award entered 9 April 1998 by the North Carolina Industrial Commission. Heard in the Court of Appeals 24 February 1999.\nMichaels Jones Martin Parris & Tessener, PLLC, by James S. Walker, for plaintiff-appellee.\nOrbock Bowden Ruark & Dillard, PC, by Barbara E. Ruark, for defendant-appellant Key Benefit Services."
  },
  "file_name": "0720-01",
  "first_page_order": 754,
  "last_page_order": 762
}
