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  "name_abbreviation": "Vogler v. Branch Erections Co.",
  "decision_date": "2004-09-07",
  "docket_number": "No. COA03-1032",
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    "judges": [
      "Judges McGEE and TYSON concur."
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    "parties": [
      "MARY NICOLE BOONE VOGLER, Widow, MARILYN \u201cSUE ANN\u201d CLYMER, Guardian Ad Litem for KRISTIN DAKOTA VOGLER, Minor Child, and MARK BOONE, Guardian Ad Litem for MEGAN NICOLE BOONE, Minor Stepchild, of BILLY CHARLES VOGLER, Deceased Employee, Plaintiffs v. BRANCH ERECTIONS COMPANY, INC., Employer, THE GOFF GROUP, Carrier (NOW DISMISSED), N.C. GUARANTY ASSOCIATION (NOW ADDED), Statutory Insurer, Defendants"
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      {
        "text": "TIMMONS-GOODSON, Judge.\nDefendant North Carolina Guaranty Association (\u201cthe Association\u201d) appeals the amended opinion and award of the North Carolina Industrial Commission (\u201cthe Commission\u201d) awarding plaintiffs a ten percent increase in worker\u2019s compensation. For the reasons stated herein, we reverse the Commission\u2019s amended opinion and award and remand the case for further proceedings.\nThe facts and procedural history pertinent to the instant appeal are as follows: On 23 March 2000, Billy Charles Vogler (\u201cdecedent\u201d) was an employee of Branch Erections Company, Inc. (\u201cBranch\u201d). Decedent was working on a communications tower when a nearby crane broke from its platform and fell, striking decedent and causing him to fall twenty feet to the ground. As a result of his injuries, decedent was killed. Decedent is survived by his wife, Mary Nicole Boone Vogler, his daughter, Kristin Dakota Vogler, and his stepdaughter, Megan Nicole Boone (collectively, \u201cplaintiffs\u201d).\nShortly after decedent\u2019s injury, the Occupational Safety and Health Administration (\u201cOSHA\u201d) investigated the accident. The OSHA investigator determined that Branch had failed to inspect the crane turret bolts for two years prior to the accident, although OSHA regulations require daily inspection of the crane\u2019s turret bolts when the crane is in use. The OSHA investigator further determined that Branch\u2019s failure to inspect the crane and other equipment resulted in worn, cracked, and rusty crane turret bolts on the crane, which caused the crane to snap and fall on top of decedent. The OSHA investigator ultimately cited Branch for twenty violations of OSHA regulations, all of which were characterized as \u201cserious.\u201d\nSubsequent to decedent\u2019s death, plaintiffs filed a worker\u2019s compensation claim against Branch and its insurer, Reliance Insurance Company (\u201cReliance\u201d). On 14 December 2001, North Carolina Industrial Commission Deputy Commissioner George T. Glenn (\u201cDeputy Commissioner Glenn\u201d) issued an opinion and award entitling plaintiffs to weekly benefits, expenses for decedent\u2019s burial, medical expenses incurred by decedent as a result of the accident, and attorneys\u2019 fees. In addition to this award, Deputy Commissioner Glenn concluded as a matter of law that \u201c[p]laintiffs are entitled to a 10% penalty due to [Branch\u2019s] willful violations of OSHA safety standards,\u201d and ordered that \u201c [Branch and Reliance] shall pay a ten percent (10%) penalty of the total amount due plaintiffs.\u201d Branch appealed the award to the Commission. On 17 July 2002, the Commission issued an opinion and award affirming Deputy Commissioner Glenn\u2019s decision.\nOn 3 October 2001, Reliance was declared insolvent. Thus, pursuant to the Insurance Guaranty Association Act (\u201cGuaranty Act\u201d), N.C. Gen. Stat. \u00a7 58-48-1 (2003) et. seq, the Association assumed Reliance\u2019s obligations to the case.\nOn 13 August 2002, the Association filed a Motion For Joinder As Party; And To Reconsider And To Alter And Amend Judgment. The Association asserted that it was not responsible for payment of the ten percent \u201cpenalty\u201d for Branch\u2019s willful violation of OSHA safety rules because the \u201cpenalty\u201d was not covered by the Guaranty Act and because plaintiffs\u2019 claim was not covered by the policy between Branch and Reliance. On 20 September 2002, Branch filed a response to the Association\u2019s motion for reconsideration, asserting that the Association is obligated to pay the ten percent \u201cpenalty\u201d under the Worker\u2019s Compensation Act and that the Guaranty Act does not excuse the Association from liability. The Association filed a reply asserting that it is not the legal successor of Reliance, and reiterating its assertion that the ten percent \u201cpenalty\u201d is not covered by the Guaranty Act or by Branch\u2019s insurance policy with Reliance.\nOn 28 April 2003, the Commission issued an amended opinion and award. The Commission\u2019s amended opinion and award contained the following pertinent conclusions of law:\n9. [The Association] denies any obligation to pay the additional compensation awarded pursuant to N.C. Gen. Stat. \u00a7 97-12 based upon two arguments. First, [the Association] asserts that the additional compensation is not within the coverage of the insurance policy issued by Reliance because the policy specifically requires [Branch] to be responsible for any payment in excess of the benefits regularly provided by the Worker\u2019s Compensation Act, including those imposed due to the employer\u2019s failure to comply with a health or safety law or regulation. This first issue is a coverage question not properly before the Commission for determination at this time. The record before us contains no evidence concerning the contractual provisions of the insurance policy on which to base findings of fact and conclusions of law. Although portions of the policy were attached to the briefs of the parties, no evidence on the coverage issue is properly before the Commission because no evidence was presented at the Deputy Commissioner hearing. Therefore, the coverage question is reserved for further hearing and subsequent determination in the event the parties are unable to resolve this issue.\n10. Secondly, [the Association] argues that the award of additional compensation under N.C. Gen. Stat. \u00a7 97-12 constitutes a \u201cpenalty\u201d and that the Guaranty Act specifically excludes amounts awarded as punitive or exemplary damages. See, N.C. Gen. Stat. \u00a7 58-48-20(4). However, the clear language of N.C. Gen. Stat. \u00a7 97-12 provides that \u201ccompensation shall be increased ten percent (10%)\u201d (emphasis added). The North Carolina Court of Appeals has stated that \u201c \u2018[I]f the language of the statute is clear and is not ambiguous, we must conclude that the legislature intended the statute to be implemented according to the plain meaning of its terms.\u2019 \u201d Morris Communications Corp. v. City of Asheville, 145 N.C. App. 597, 605, 551 S.E.2d 508, 514 (2001), citing Hyler v. GTE Prods. Co., 333 N.C. 258, 262, 425 S.E.2d 698, 701 (1993). Thus, based upon a clear reading of the statute, the ten percent additional compensation awarded pursuant to N.C. Gen. Stat. \u00a7 97-12 is compensation or punitive damages. Therefore, the additional compensation is part of a covered claim and must be paid by [the Association].\nIt is from this amended opinion and award that the Association appeals.\nThe issues presented on appeal are: (I) whether the Commission erred by failing to consider Branch\u2019s insurance policy with Reliance; and (II) whether the Commission erred by concluding that the increase in compensation pursuant to N.C. Gen. Stat. \u00a7 97-12 was not a \u201cpenalty.\u201d Because we conclude the Commission erred by failing to consider Branch\u2019s insurance policy with Reliance in making its determination, we reverse the Commission\u2019s opinion and award and remand the case for further proceedings.\nOn appeal of a decision by the Commission, this Court \u2022 is \u201climited to reviewing whether any competent evidence supports the Commission\u2019s findings of fact and whether the findings of fact support the Commission\u2019s conclusions of law.\u201d Deese v. Champion Int\u2019l Corp., 352 N.C. 109, 116, 530 S.E.2d 549, 553 (2000). The Commission \u201cis not required ... to find facts as to all credible evidence. That requirement would place an unreasonable burden on the Commission. Instead, the Commission must find those facts which are necessary to support its conclusions of law.\u201d Peagler v. Tyson Foods, Inc., 138 N.C. App. 593, 602, 532 S.E.2d 207, 213 (2000). However, the Commission must also \u201cmake specific findings with respect to crucial facts upon which the question of plaintiff\u2019s right to compensation depends.\u201d Gaines v. Swain & Son, Inc., 33 N.C. App. 575, 579, 235 S.E.2d 856, 859 (1977). Thus, \u201c[although the Industrial Commission is the sole judge of the credibility and the evidentiary weight to be given to witness testimony, the Commission\u2019s conclusions of law are fully reviewable.\u201d Holley v. ACTS, Inc., 357 N.C. 228, 231, 581 S.E.2d 750, 752 (2003) (citations omitted). \u201cWhen the Commission acts under a misapprehension of the law, the award must be set aside and the case remanded for a new determination using the correct legal standard.\u201d Ballenger v. ITT Grinnell Industrial Piping, 320 N.C. 155, 158, 357 S.E.2d 683, 685 (1987).\nWhere an insurer has become insolvent, the Guaranty Act requires that the Association:\n(1) Be obligated to the extent of the covered claims existing prior to the determination of insolvency and arising within 30 days after the determination of insolvency, or before the policy expiration date[.].. .In no event shall the Association be obligated to a policyholder or claimant in an amount in excess of the obligation of the insolvent insurer under the policy from which the claim arises.\n[and]\n(2) Be deemed the insurer to the extent of the Association\u2019s obligation on the covered claims and to such extent shall have all rights, duties, and obligations of the insolvent insurer as if the insurer had not become insolvent.\nN.C. Gen. Stat. \u00a7 58-48-35(a)(l) and (2) (2003) (emphasis added).\nThe Guaranty Act defines a \u201ccovered claim\u201d in pertinent part as follows:\n\u201cCovered claim\u201d means an unpaid claim, including one of unearned premiums, which is in excess of fifty dollars ($50.00) and arises out of and is within the coverage and not in excess of the applicable limits of an insurance policy .... \u201cCovered claim\u201d shall not include any amount awarded ... as punitive or exemplary damages[.]\nN.C. Gen. Stat. \u00a7 58-48-20(4) (2003) (emphasis added).\nIn accordance with the Guaranty Act, this Court has previously limited the Association\u2019s obligations to those benefits the employee would have recovered as a beneficiary of his employer\u2019s insurance policy. In Greensboro v. Reserve Ins. Co., 70 N.C. App. 651, 321 S.E.2d 232 (1984), we held that the Association was not liable for prejudgment interest owed to the plaintiffs. We recognized that \u201cit is the identity of the Association as a statutory creation that relieves it from liability for prejudgment interest.\u201d Id. at 664, 321 S.E.2d at 240. Thus, we concluded that, \u201c[a]s the Superior Court of Pennsylvania reasoned in a 1980 case, interpreting statutes similar to North Carolina\u2019s, a guaranty association is not the legal successor of the Insolvent insurer; rather, it is obligated to pay claims only to the extent of covered claims, which shall not include any amount in excess of the obligation of the insolvent insurer under the policy from which the claim arises.\u201d Id. (citing Sands v. Pa. Ins. Guaranty Ass\u2019n., 423 A. 2d 1224, 1229 (1980)). Similarly, in BarclaysAmerican/Leasing, Inc. v. N.C. Ins. Guaranty Ass\u2019n, 99 N.C. App. 290, 392 S.E.2d 772 (1990), disc. review denied, 328 N.C. 328, 402 S.E.2d 829 (1991), we recognized that the plaintiffs claim was excluded by the underlying insurance policy, and thus neither the insolent insurer nor the Association was liable for the plaintiffs claim. Accordingly, we reversed the trial court\u2019s decision granting summary judgment in favor of the plaintiff, and we remanded the case for entry of summary judgment in favor of the Association, whom we noted was not required to assume the obligation of uncovered claims. Id. at 294, 392 S.E.2d at 774.\nIn the instant case, the Association argued in its motion for reconsideration that the ten percent increase in compensation awarded by Deputy Commissioner Glenn was \u201cnot within the coverage of the insurance policy issued by Reliance[.]\u201d The insurance policy between Branch and Reliance (\u201cthe policy\u201d) reads in pertinent part:\nPART ONE \u2014 WORKERS\u2019 COMPENSATION INSURANCE\nF. Payments You Must Make\nYou are responsible for any payments in excess of the benefits regularly provided by the workers\u2019 compensation law including those required because:\n1. of your serious and willful misconduct;\n3. you fail to comply with a health or safety law or regulation[.]\nPART TWO \u2014 EMPLOYER\u2019S LIABILITY INSURANCE\nC. Exclusions\nThis insurance does not cover:\n4. any obligation imposed by a workers\u2019 compensation, occupational disease, unemployment compensation or disability benefits law or any similar law;\n11. fines or penalties imposed for violation of federal or state law[.]\nThe Association provided the Commission with a copy of the policy and argued in support of the terms of the policy when the case was reconsidered. As detailed above, in the amended opinion and award, the Commission concluded that the issue of whether plaintiff\u2019s claim was a \u201ccovered claim\u201d under the policy was not \u201cproperly before the Commission for determination\u201d because \u201cthe record . . . contains no evidence concerning the contractual provisions of the insurance policy on which to base findings of fact and conclusions of law . . . because no evidence was presented at the Deputy Commissioner hearing.\u201d However, in its next conclusion of law the Commission nevertheless determined that \u201cthe additional compensation is part of a covered claim and must be paid by the Association.\u201d We conclude that the Commission erred.\nThe Commission chose not to determine the issue in the instant case because Deputy Commissioner Glenn had not determined the issue or received evidence pertaining to it. However, the Commission cited no authority for its conclusion that, because the Deputy Commissioner had not considered an issue, it could not in turn consider the issue. We note that the Worker\u2019s Compensation Act provides that on appeal of a Deputy Commissioner\u2019s opinion and award, the Commission \u201cshall review the award, and, if good ground be shown therefor, reconsider the evidence, receive further evidence, rehear the parties or their representatives, and, if proper, amend the award[.]\u201d N.C. Gen. Stat. \u00a7 97-85 (2003). \u201cWhether good ground is shown is within the sound discretion of the Commission, and the Commission\u2019s determination in that regard will not be reviewed on appeal absent abuse of discretion.\u201d Thompson v. Burlington Industries, 59 N.C. App. 539, 543, 297 S.E.2d 122, 125 (1982), cert. denied, 307 N.C. 582, 299 S.E.2d 650 (1983).\nAs detailed above, the Guaranty Act and the cases interpreting it require that the Commission determine whether an employee\u2019s claim is covered under an insurance policy before holding the Association liable for an insolvent insurance company\u2019s nonpayment of a claim. However, in the instant case, the Commission refused to consider the policy proffered by the Association, despite allowing the Association to join the case as a party, thereby granting the Association the right to assert its own defenses. We conclude that the Association\u2019s recent entry into the case, coupled with the Association\u2019s argument that it was statutorily prevented from the obligation claimed by plaintiffs, is \u201cgood ground\u201d for the Commission to reconsider the evidence and receive further evidence in the case, in the form of the policy between Branch and Reliance. Thus, we also conclude the Commission abused its discretion by declining to receive the policy as evidence and by failing to take into account the terms of the policy while reconsidering the case.\nFurthermore, as discussed above, in any opinion and award, the Commission must make those \u201cspecific findings with respect to [the] crucial facts\u201d necessary to determine whether ah employee is entitled to compensation. Gaines, 33 N.C. App. at 579, 235 S.E.2d at 859. Accordingly, the Commission\u2019s conclusions must be supported by sufficient findings of fact. Peagler, 138 N.C. App. at 602, 532 S.E.2d at 213. In the instant case, the Commission concluded that the additional compensation was part of a \u201ccovered claim,\u201d despite failing to make any findings of fact regarding the policy and despite previously concluding that the issue of whether the additional compensation was part of a \u201ccovered claim\u201d was not properly before the Commission. Therefore, we further conclude that the Commission\u2019s determination is not supported by sufficient findings of fact.\nIn light of our conclusions, we hold that the Commission erred in its amended opinion and award, and, accordingly, we reverse the amended opinion and award and remand the case for further proceedings. On remand, the Commission shall receive and consider the evidence it deems necessary for a proper determination of plaintiffs\u2019 claims consistent with this opinion, including the insurance policy between Branch and Reliance.\nReversed and remanded.\nJudges McGEE and TYSON concur.",
        "type": "majority",
        "author": "TIMMONS-GOODSON, Judge."
      }
    ],
    "attorneys": [
      "J. Randolph Ward, for defendant-appellee Branch Erections Company, Inc.",
      "Nelson Mullins Riley & Scarborough, L.L.P., by Christopher J. Blake and Joseph W. Eason, for defendant-appellant N.C. Guaranty Association."
    ],
    "corrections": "",
    "head_matter": "MARY NICOLE BOONE VOGLER, Widow, MARILYN \u201cSUE ANN\u201d CLYMER, Guardian Ad Litem for KRISTIN DAKOTA VOGLER, Minor Child, and MARK BOONE, Guardian Ad Litem for MEGAN NICOLE BOONE, Minor Stepchild, of BILLY CHARLES VOGLER, Deceased Employee, Plaintiffs v. BRANCH ERECTIONS COMPANY, INC., Employer, THE GOFF GROUP, Carrier (NOW DISMISSED), N.C. GUARANTY ASSOCIATION (NOW ADDED), Statutory Insurer, Defendants\nNo. COA03-1032\n(Filed 7 September 2004)\nWorkers\u2019 Compensation\u2014 amended opinion \u2014 ten percent increase \u2014 insolvent insurer \u2014 guaranty association\nThe Industrial Commission erred in its amended opinion and award by determining that a ten percent increase in compensation assessed against an employer under N.C.G.S. \u00a7 97-12 due to the employer\u2019s willful violations of OSHA safety standards was a \u201ccovered claim\u201d for which the N.C. Guaranty Association was liable after the employer\u2019s insurer became insolvent without considering the provisions of the insurance policy between the employer and its insolvent insurer because (1) the Guaranty Act and the cases interpreting it require that the Commission determine whether an employee\u2019s claim is covered under an insurance policy before holding defendant Guaranty Association liable for an insolvent insurance company\u2019s nonpayment of a claim; (2) the Commission abused its discretion by declining to receive the policy as evidence and by failing to take into account the terms of the policy while reconsidering the case when the Association\u2019s recent entry into the case, coupled with its argument that it was statutorily prevented from the obligation claimed by plaintiffs, is good grounds for the Commission to reconsider the evidence and receive further evidence in the case; and (3) the Commission\u2019s determination was not supported by sufficient findings of fact when it concluded the additional compensation was part of a covered claim.\nAppeal by defendants from opinion and award entered 28 April 2003 by the North Carolina Industrial Commission. Heard in the Court of Appeals 19 May 2004.\nJ. Randolph Ward, for defendant-appellee Branch Erections Company, Inc.\nNelson Mullins Riley & Scarborough, L.L.P., by Christopher J. Blake and Joseph W. Eason, for defendant-appellant N.C. Guaranty Association."
  },
  "file_name": "0169-01",
  "first_page_order": 199,
  "last_page_order": 207
}
