GWENDOLYN DIANETTE WALKER, Widow of ROBERT LEE WALKER, Deceased Employee, Plaintiff,
K&W CAFETERIAS, Employer, LIBERTY MUTUAL INSURANCE COMPANY, Carrier, Defendants.
in the Court of Appeals 17 January 2019.
by plaintiff from Opinion and Award entered 27 February 2018
by the North Carolina Industrial Commission. I.C. No. Y18900
Sumwalt Law Firm, by Vernon Sumwalt, for plaintiff-appellant.
Cranfill Sumner & Hartzog LLP, by Carl Newman and Roy G.
Pettigrew, for defendant-appellees.
Lee Walker ("Decedent") was killed in a motor
vehicle accident while driving a truck owned by K&W
Cafeterias, Inc. ("Employer") in South Carolina on
16 May 2012. Decedent was a resident of South Carolina.
Employer is a North Carolina corporation and headquartered in
Winston-Salem. Employer's vehicle Decedent was driving
when the accident occurred was insured under an automobile
liability policy underwritten by Liberty Mutual Insurance
Company ("Insurer") (Employer and Insurer
collectively referred to as "Defendants"). The
automobile liability policy was purchased and entered into
within North Carolina.
August 2012, Decedent's widow, Gwendolyn Walker
("Plaintiff"), filed a claim for death benefits
pursuant to the North Carolina Workers' Compensation Act.
N.C. Gen. Stat. § 97-38 (2017). With the consent of the
parties, the Industrial Commission entered an opinion and
award, which included several joint stipulations, including,
in relevant part:
1. . . . [Decedent] died as the result of a motor vehicle
accident arising out of and in the course of his employment
2.At all relevant times, the parties hereto were subject to
and bound by the provisions of the North Carolina
Workers' Compensation Act.
. . .
6. The North Carolina Industrial Commission has jurisdiction
over the parties and the subject matter involved in this
. . .
8. On the date of [Decedent's] death, [Decedent] had six
children. However, all children were over the age of eighteen
on the date of [Decedent's] death. . . .
11. Plaintiff Gwendolyn Dianette Walker is the widow and sole
surviving dependent of [Decedent].
upon the parties' stipulations, and with the consent of
the parties, the Industrial Commission ordered Defendants to
pay Plaintiff five hundred weekly payments of $650.89 each
and an additional payment of $8, 318 for funeral expenses,
for total anticipated benefits of $333, 763.
was appointed the personal representative of Decedent's
estate in South Carolina. On 26 August 2014, Plaintiff, as
personal representative of the estate, filed a wrongful death
and survival action against the at-fault driver and his
father in the Horry County Court of Common Pleas in South
Carolina. In March 2016, Plaintiff, the at-fault driver and
his father settled the lawsuit and Plaintiff received a total
of $962, 500 under the settlement ("the third-party
settlement"). The total settlement amount of $962, 500
came from the following sources:
1. $50, 000 in liability benefits from the at-fault
2. $12, 500 in personal underinsured motorist
("UIM") coverage covering Plaintiff and
Decedent's own personal vehicle from Plaintiff's own
automobile insurance carrier; and
3. $900, 000 in commercial UIM coverage covering the vehicle
Decedent was driving when the accident occurred from
Employer's automobile insurance carrier, Insurer.
March 2016, Defendants filed a Form 33 request for hearing
with the North Carolina Industrial Commission seeking a
subrogation lien against $333, 763 of the $962, 500 Plaintiff
had received from the third-party settlement. On 30 March
2016, Plaintiff filed a declaratory judgment action in the
Horry County Court of Common Pleas in South Carolina seeking
a declaration of "whether the Defendants are entitled to
assert a claim against any and all settlement proceeds,
including those settlement proceeds paid under the
[underinsured motorist] coverage."
removed Plaintiff's declaratory judgment action to the
United States District Court for the District of South
Carolina based upon the diversity of state citizenship of the
parties on 2 May 2016. On 13 June 2016, Plaintiff filed a
motion with the North Carolina Industrial Commission to stay
the proceedings, pending the outcome of the declaratory
judgment action in the United States District Court. The
Industrial Commission denied Plaintiff's motion to stay
the proceedings by an order filed 28 June 2016.
July 2016, Plaintiff filed an appeal for a hearing before a
deputy commissioner. Before the scheduled hearing, "the
parties jointly requested that in lieu of testimony, they be
allowed to try the case on stipulated facts and exhibits with
the submission of briefs and proposed decisions[.]"
Plaintiff argued South Carolina law controlled over North
Carolina law to the extent South Carolina forbids subrogation
of UIM proceeds for workers' compensation benefits under
S.C. Code § 38-77-160.
July 2017, the deputy commissioner filed an opinion and award
ruling in favor of Defendants and requiring Plaintiff to
apply the $962, 500 from the third- party settlement to
satisfy Defendants' $333, 763 subrogation lien. Plaintiff
appealed the deputy commissioner's opinion and award to
the full Industrial Commission ("the Full
January 2018, while Plaintiff's appeal to the Full
Commission was pending, the United States District Court
entered an order holding it "will abstain from
exercising jurisdiction over [Plaintiff's] declaratory
action, and will dismiss it without prejudice to the parties
pursuing their claims before the Industrial Commission and
the North Carolina appellate courts."
February 2018, the Full Commission issued an opinion and
award. The Full Commission found, in relevant part:
3. . . . Decedent was killed when his vehicle was struck by
another vehicle operated by . . . "third parties,"
as defined in . . . N.C. Gen. Stat. § 97-10.2(a).
. . .
12. Under the terms of the Consent Opinion and Award,
Plaintiff and Defendants stipulated to the Industrial
Commission's jurisdiction over Plaintiff's
workers' compensation claim. Furthermore, N.C. Gen. Stat.
§§ 97-91 and 97-10.2 confer the Industrial
Commission with personal jurisdiction over Plaintiff and
subject matter jurisdiction over all aspects of the
workers' compensation claim, including Defendant's
. . .
14. Plaintiff conceded in her brief to the Deputy
Commissioner that the distribution formula in N.C. Gen. Stat.
§ 97-10.2(f) would apply to the $50, 000.00 in liability
15. Plaintiff's $900, 000.00 in commercial UIM proceeds
were paid pursuant to a North Carolina liability policy.
While the policy contains a South Carolina endorsement (as
well as endorsements or financial responsibility
identification cards for Florida, West Virginia, and
Virginia), the UIM policy was made in North Carolina, was
paid pursuant to the provisions of a North Carolina policy,
and is subject to the laws of this State.
Full Commission concluded Defendants were entitled to a
subrogation lien on the entire third-party settlement
proceeds "and not just [Plaintiff's] share of the
Third-Party Recovery." The Full Commission's opinion
and award directed the distribution of the third-party
settlement amount of $962, 500 as follows:
a. The sum of $5, 921.91 shall be paid to Plaintiff's
counsel for payment of actual costs pursuant to N.C. Gen.