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324 N.C. 424

378 S.E.2d 771

Pollard v. Smith

Supreme Court of North Carolina · decided 1989-05-04

Subrogation 1; Master and Servant 99.4 — injury to highway patrolman — settlement with third party — no notice to Department of Crime Control and Public Safety — settlement void A settlement between a highway patrolman injured in an automobile accident and the estate of the other party involved in the collision was void where the Department of Crime Control and Public Safety had paid workers' compensation benefits to the patrolman and did not give its written consent to the settlement. N.C.G.S. <cross_reference>97-10.2</cross_reference> (j) must be read in part materia with the rest of the section, which requires that the Department give a written consent before a settlement may be made.

Key passage — most relied on by later courts

“In any proceeding against or settlement with the third party, every party to the claim for compensation shall have a lien to the extent of his interest . . . upon any payment made by the third party by reason of such injury or death . . . . Neither the employee or his personal representative nor the employer shall make any settlement with or accept any payment from the third party without the written consent of the other and no release to or agreement with the third party shall be valid or enforceable for any purpose unless both employer and employee or his personal representative join therein ....”

quoted by 2 later decisions, including Williams ex rel. Heidgerd v. International Paper Co., Easter-Rozzelle v. City of Charlotte

“In the event that a judgment is obtained which is insufficient to compensate the subrogation claim of the Workers' Compensation Insurance Carrier, or in the event that a settlement has been agreed upon by the employee and the third party when said action is pending on a trial calendar and the pretrial conference with the judge has been held, either party may apply to the resident superior court judge of the county in which the cause of action arose or the presiding judge before whom the cause of action is pending, for determination as to the amount to be paid to each by such third party tortfeasor. If the matter is pending in the federal district court such determination may be made by a federal district court judge of that division.”

quoted by 1 later decision, including Easter-Rozzelle v. City of Charlotte

Relies on McMillan v. Robeson County · Walker v. American Bakeries Co.

Good law ✅— No negative treatment on recordhow we know

Decided 1989-05-04

How this case has been cited

Cited by 28 later decisions — most recently December 2017 · most notably 100 N.C. App. 490 - Allen v. Rupard (1990), Johnson v. Southern Industrial Constructors, Inc. (1998)

2 district · 26 state decisions

1201989199020002010decided

Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

View the full empirical analysis of this case →

WEBB, Justice.

¶1 The Department makes two assignments of error. It says first that it was error for the superior court to order the disbursal of the proceeds from the settlement without notice to the Department. In its second assignment of error the Department contends the court erred in ordering the entire amount of the settlement to be given to the plaintiff.

¶2 As to its contention that it was error not to give the Department notice and a chance to be heard before disbursing the funds the Department argues that the action of the superior court violates the constitutions of the United States and North Carolina. McMillan v. Robeson County, 262 N.C. 413, 137 S.E. 2d 105 (1964). *426 In our view of the case it is not necessary to reach the constitutional question.

¶3 The rights of an employer who has paid workers’ compensation and an employee in respect to a common law cause of action against a third party are governed by N.C.G.S. § 97-10.2. That section provides in subsections (b), (c), and (d) that in certain circumstances either the employer or the employee may bring the action. Either party who brings the action has the right to settle it subject to the provisions of subsection (h). Subsection (h) provides: “[njeither the employee or his personal representative nor the employer shall make any settlement . . . without the written consent of the other.” In 1983 N.C.G.S. § 97-10.2 was amended by adding subsection (j) which in pertinent part says:

[I]n the event that a settlement has been agreed upon by the employee and the third party when said action is pending on a trial calendar and the pretrial conference with the judge has been held, either party may apply to the resident superi- or court judge of the county in which the cause of action arose or the presiding judge before whom the cause of action is pending, for determination as to the amount to be paid to each by such third party tortfeasor.

¶4 We believe subsection (j) must be read in pari materia with the rest of the section. Walker v. Bakeries Co., 234 N.C. 440, 67 S.E. 2d 459 (1951). Other parts of the section provide a procedure for settling a case. We do not believe the legislature intended this procedure to be ignored when settling a case pursuant to subsection (j). The procedure requires that the Department give a written consent before a settlement may be made.

¶5 The settlement between plaintiff and the defendants in this case is void because it does not comply with N.C.G.S. § 97-10.2(h) in that the Department did not give its written consent to the settlement. The Department was not prejudiced by not receiving notice of the motion to disburse the funds.

¶6 In the light of our disposition of this case we do not pass on the Department’s second assignment of error. We reverse the decision of the Court of Appeals and remand for further proceedings consistent with this opinion.

¶7 Reversed and remanded.

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