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Apr 22, 2021

Girlfriend’s Dependency Claim Filed in Face of NC Supreme Court Decision Does Not Warrant Sanctions

Notwithstanding the doctrine of stare decisis, in this case a clear holding by the North Carolina Supreme Court that a person living in cohabitation with another, to whom he or she is not married, is not a person entitled to workers’ compensation death benefits under N.C. Gen. Stat. § 97-39, the state’s Industrial Commission was within its discretion when it refused to enter an order sanctioning a claim filed by the Decedent’s girlfriend—at his death, Decedent was still married to his estranged spouse [West v. Hoyle’s Tire & Axle, LLC, 2021-NCCOA-151, 2021 N.C. App. LEXIS 153 (Apr. 14, 2021)]. Sufficient evidence in the record supported the Commission’s findings of fact, and in turn, conclusion of law that the girlfriend’s pursuit of the issue questioning the interpretation of the language of the statute did not reflect “stubborn, unfounded litigiousness,” but rather represented a good faith argument to change the precedent set in the Supreme Court’s decision.

Background

Keith West (“Decedent”) was killed in a work-related accident while working for the employer. The employer and carrier admitted compensability for death benefits. Decedent’s adult daughter, adult son, and estranged wife (“the family members”) all asserted death benefit claims under the North Carolina Workers’ Compensation Act, as did Decedent’s alleged girlfriend or fiancé, Shannon Stocks (“Stocks”). Stocks admitted that she was not married to Decedent, but claimed that she was cohabitating with and partially dependent upon him for certain expenses.

The employer and carrier filed a Form 33 request for hearing, seeking to determine the proper beneficiaries for the claim. The family members filed a motion to dismiss Stocks’ claim and, additionally, they sought attorneys’ fees and sanctions from Stocks, contending that pursuant to N.C. Gen. Stat. § 97-39, Stocks had no standing to make a claim. The deputy commissioner granted the family members’ motion to dismiss and motion for attorneys’ fees and sanctions.

Full Commission Refused to Award Attorneys’ Fees

A divided Full Commission affirmed in relevant part, finding that under Fields v. Hollowell & Hollowell, 238 N.C. 614, 78 S.E.2d 740 (1953), Stocks had no dependency claim. However, the Commission denied the family members’ request for sanctions in the form of attorneys’ fees against Stocks pursuant to N.C. Gen. Stat. § 97-88.1.

Appellate Court’s Decision

On the issue of sanctions in the form of attorneys’ fees, the appellate court noted that under § 97-88.1, reasonable fees may be awarded if the Industrial Commission determines that any hearing has been brought, prosecuted, or defended without reasonable ground. The court noted earlier decisions in which it had explained that the purpose of N.C. Gen. Stat. § 97-88.1 was to deter stubborn, unfounded litigiousness, which was inharmonious with the primary consideration of the Workers’ Compensation Act.

Citing additional precedent, the court acknowledged that a court could award sanctions when a party violated N.C. Gen. Stat. § 1A-1, Rule 11 by filing pleadings not well founded in fact and warranted by existing law or a good faith argument for extension, modification, or reversal of the existing law. Here, the family members contended that Stocks had filed her claim without reasonable ground, citing § 97-88.1 and the Supreme Court’s holding in Fields.

Plain Text of Statute Did Not Dispose of Claim

The appellate court stressed that the plain wording of § 97-88.1 did not dispose of Stocks’ claim. It observed that N.C. Gen. Stat. § 97-39 provided in relevant part:

A widow, a widower, and/or a child shall be conclusively presumed to be wholly dependent for support upon the deceased employee. In all other cases questions of dependency, in whole or in part shall be determined in accordance with the facts as the facts may be at the time of the accident.

According to the court, Stocks could fall into the category of “all other cases,” allowing her to prove her factual dependency.

Pairing Statute with Fields Decision

It was only when the statute was paired with Fieldsthat Stocks argument could be specifically disposed. In Fields, the N.C. Supreme Court explained “a woman living in cohabitation with a man, to whom she is not married, is not within the purview of the term ‘in all other cases’” [see Fields, 238 N.C. at 618, 78 S.E.2d at 743]. The court observed that the parties did not dispute the principle of stare decisis would operate to bar Stocks’ argument regarding her entitlement to benefits. It observed, however, that the Full Commission considered Stocks’ argument a “good faith argument for … reversal of the existing law” in Fields.

The court said it agreed. It found, therefore, that the Full Commission was not required to order sanctions against Stocks in punishment of those efforts.