Case Law Update

Friday, September 27, 2013 | 0

Excusable neglect, Rule 613

On Aug. 1, 2007, Adan Nieto-Espinoza filed a Form 18, alleging that he had sustained a workplace injury in May 2007. On Sept. 7, 2010, Deputy Commissioner Phillips granted Nieto-Espinoza’s motion for voluntary dismissal. On Oct. 18, 2010, Nieto-Espinoza’s counsel acknowledged receipt and service of a copy of Deputy Commissioner Phillips’ order of dismissal. Nieto-Espinoza’s paralegal calendared the one-year deadline to refile for Oct. 18, 2011, as opposed to Sept. 7, 2011, one year from the date of entry of the order. On Oct. 3, 2011, Nieto-Espinoza’s counsel moved to file a Form 33 due to excusable neglect. On Nov. 5, 2011, Deputy Commissioner Phillips denied Nieto-Espinoza’s motion, noting that the claim was barred by Rule 613. Nieto-Espinoza appealed to the Full Commission, and it affirmed Deputy Commissioner Phillips' order. He then appealed to the Court of Appeals.

On Aug. 20, 2013, in Nieto-Espinoza v. Lowder Construction, Inc., the Court of Appeals first addressed the issue of whether the full commission erred by concluding that Nieto-Espinoza’s failure to timely refile his claim was not due to excusable neglect. In rejecting this argument, the court noted the provisions of Rule 613 that “[u]nless otherwise ordered by the Industrial Commission, a plaintiff shall have one year from the date of the Order of Voluntary Dismissal to re-file his claim.” Excusable neglect is not specifically defined in the Commission Rules, but the Rules of Civil Procedure provide guidance in the absence of a specific Industrial Commission Rule and Rule 60 of the North Carolina Rules of Civil Procedure provides relief from a final judgment only for “mistake, inadvertence, surprise, or excusable neglect [.]” Deliberate or willful conduct does not constitute excusable neglect, nor does inadvertent conduct that is not diligent. The Commission found that Nieto-Espinoza’s behavior displayed a lack of diligence because he failed to note the date of entry of the order: Sept. 7, 2010, and as such, his behavior was careless, if not negligent.

The court then considered whether the full commission abused its discretion by declining to waive, pursuant to Rule 801, the one-year deadline under Rule 613 for Nieto-Espinoza to refile his claim. The court also rejected this argument because it found no abuse of discretion by the Commission. Even though under Rule 801 the Commission can waive rules in the interest of justice, it is within the Commission’s discretion to do so.

Terminating temporary total disability benefits

Claude V. Medlin worked for Weaver Cooke Construction as a project engineer, project manager and estimator. In December 2008, Medlin injured his right shoulder in a compensable workplace incident. He continued working with Weaver Cooke until he was laid off in November 2008. The parties stipulated that Medlin was laid off because of a “reduction of staff due to lack of work.” In January 2009, Medlin began receiving unemployment benefits; in February 2009, he began receiving temporary total disability benefits. For a little more than two years, Medlin received overlapping unemployment and TTD benefits. Medlin eventually was placed at maximum medical improvement and assigned permanent work restrictions, which included no lifting greater than 10 pounds, no climbing ladders and no repetitive overhead activities. In December 2010, defendants filed an application to terminate payment of compensation, arguing that Medlin was no longer able to establish disability related to his injury. The thrust of their argument was that the only reason Medlin could not obtain an estimator position with another employer was due to the economic downturn and not based on any physical restrictions as a result of the work injury. After a hearing, the full commission concluded that Medlin could not establish a disability due to his work injury at any time after Dec. 22, 2010, and, as a result, defendants were entitled to terminate Medlin’s ongoing temporary total disability benefits and compensation paid after Dec. 22, 2010. Medlin appealed.

On Sept. 3, 2013, in Medlin v. Weaver Cooke Construction, L.L.C., the court considered whether the full commission erred in concluding that Medlin failed to carry his burden of continuing disability. Rejecting this argument, the Court reiterated the ways an injured employee may demonstrate the required causal link between wage loss and a work-related injury as established in Russell v. Lowes. In Medlin’s case, a labor market study was performed which revealed that two commercial construction companies similar in size to Weaver Cooke determined that someone with Medlin’s work restrictions could perform the job duties of the estimator position. A vocational rehabilitation expert also rendered an opinion that Medlin would have been able to return to work but for the current economic downturn. The court determined that Medlin was able to perform his preinjury job and that the economic downturn was the only reason he was unable to earn his preinjury wages. Because Medlin could perform his preinjury job, his evidence of a diligent job search was irrelevant.

Judge Geer dissented from the majority’s opinion because she believed Medlin presented enough evidence to satisfy the second prong of Russell and, as such, the burden shifted to defendants to show that there were suitable jobs in the economy that Medlin could actually obtain.

Teague Campbell, Dennis & Gorham is a Raleigh, N.C.-based law firm that specializes in workers' compensation defense. This column was reprinted with permission from the firm's Risk Alert newsletter.