By: Stephen Harrelson
CHARLOTTE, NC – Have you ever dealt with a claim that clearly did not occur within the scope of a plaintiff’s employment? What about a claim where an insured was clearly not a plaintiff’s actual or statutory employer? How about a claim that occurred outside of North Carolina, and the North Carolina Industrial Commission otherwise has no jurisdiction over it? Your first instinct may be to ask the Commission to dispense with such claims as soon as possible. After all, if a plaintiff brought a lawsuit before a civil court that, according to undisputed facts and applicable law, had no merit, a defendant could, at differing stages, dispense with it through a Motion to Dismiss or Motion for Summary Judgment. While it is possible to dispense with a claim without settling it or going through the hearing process, a workers’ compensation defendant’s options for doing so are more limited than those of a defendant in civil court.
The North Carolina Workers’ Compensation Act does not include a mechanism for summary judgment. Rule 613 of the Workers’ Compensation Rules of the North Carolina Industrial Commission governs dismissals. Rule 613 states, “[n]o claim filed under the Workers’ Compensation Act shall be dismissed without prejudice at plaintiff’s instance except upon order of the Industrial Commission and upon such terms and conditions as justice requires; provided, however, that no voluntary dismissal shall be granted after the record in a case is closed.” Rule 613 further states that “upon proper notice and an opportunity to be heard, any claim may be dismissed with or without prejudice by the Industrial Commission on its own motion or by motion of any party for failure to prosecute or to comply with these Rules or any Order of the Commission.”
To unpack Rule 613, as long as a plaintiff received notice of its intention to do so and had the opportunity to respond, the Commission can dismiss a claim on its own or the motion of a party, typically a defendant, if a plaintiff failed to take action to pursue the claim or comply with the Workers’ Compensation Rules of the North Carolina Industrial Commission or an Order from the Commission, such as an Order compelling the plaintiff to provide their discovery responses. If the Commission dismisses a claim with prejudice, a plaintiff cannot refile it, but if the Commission dismisses a claim without prejudice, a plaintiff can, unless otherwise ordered by the Commission, refile it within one year.
The North Carolina Court of Appeals’ holding in Lee v. Roses requires the Commission to consider three factors in granting a Motion to dismiss with prejudice. First, whether a plaintiff acted in a manner that deliberately or unreasonably delayed a matter. Second, the amount of prejudice, if any, to a defendant. Third, the reason, if it exists, why sanctions short of dismissal would be insufficient.
As you probably noticed, Rule 613 does not say that the Commission cannot dismiss a claim for reasons other than those it specifically articulates. Indeed, the Commission can dismiss a claim before a hearing or even mediation if, according to its facts and the North Carolina Workers’ Compensation Act, it has no merit or the Commission lacks jurisdiction. Unfortunately, as many seasoned claims professionals are aware, the Commission is extremely reluctant to dismiss claims before a hearing. So, if the Commission denies your Motion to Dismiss, what should you do next? Renewing your Motion in the administrative forum would likely not be worthwhile. Consequently, assuming a plaintiff filed a hearing request regarding your denial of their claim, you most likely will have to wait to address that issue at mediation, as well as a hearing if you are not interested in settling the plaintiff’s claim or mediation results in an impasse. With that said, you may still have other options on the table.
In a claim with multiple defendants that you almost certainly should have no responsibility for, it may be beneficial to file a Motion to Bifurcate, requesting that the Commission conduct a separate hearing and rule on your responsibility for the claim before a main hearing with the rest of the defendants. In some cases, it may be beneficial to, under N.C. Gen. Stat. 97-88.1, request that the Commission compel a plaintiff to pay your attorney’s fees for filing a claim and making you participate in a hearing without reasonable grounds. Requesting such fees could encourage a plaintiff to settle their claim for a reasonable amount, or, though it is far less likely, to request that the Commission voluntarily dismiss their claim. On the other hand, if the Commission denies your request, it could embolden the plaintiff’s belief in the merit of their claim. It is likely best to request attorney’s fees only if a claim clearly has no merit after completing the discovery process, you articulated that position to and requested a voluntary dismissal from a plaintiff’s attorney multiple times, and filed a Motion to Dismiss that the Commission denied.
To be direct, the North Carolina Workers’ Compensation Act and Workers’ Compensation Rules of the North Carolina Industrial Commission’s limitations on a defendant’s ability to dispense with a claim that clearly has no merit can seem unnecessarily frustrating and friendly to plaintiffs. For that reason, it is best to retain an experienced North Carolina workers’ compensation defense attorney to navigate the applicable law and resolve such a claim as efficiently and effectively as possible.