Medlin v. Weaver Cooke Construction, LLC

IN THE SUPREME COURT OF NORTH CAROLINA

No. 411A13

FILED 12 JUNE 2014

CLAUDE V. MEDLIN, Employee

v.
WEAVER COOKE CONSTRUCTION, LLC,
Employer,

KEY RISK INSURANCE COMPANY,
Carrier

Appeal pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel

of the Court of Appeals, ___ N.C. App. ___, 748 S.E.2d 343 (2013), affirming an

opinion and award filed on 19 October 2012 by the North Carolina Industrial

Commission. Heard in the Supreme Court on 18 February 2014.

Oxner, Thomas + Permar, by Michael G. Soto, for plaintiff-appellant.

Brewer Law Firm, P.A., by Joy H. Brewer and Ginny P. Lanier, for defendant-
appellees.

Sumwalt Law Firm, by Vernon Sumwalt, for North Carolina Advocates for
Justice, amicus curiae.

Young Moore and Henderson P.A., by Angela Farag Craddock, for North
Carolina Association of Defense Attorneys, North Carolina Association of Self-
Insurers, and North Carolina Chamber, amici curiae.

HUDSON, Justice.

Plaintiff Claude Medlin appealed the opinion and award of the North

Carolina Industrial Commission terminating his temporary disability payments and
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Opinion of the Court

awarding defendants Weaver Cooke Construction, LLC (“Weaver”) and Key Risk

Insurance Company a credit for all disability payments made to Medlin after 22

December 2010. ___ N.C. App. ___, ___, 748 S.E.2d 343, 344 (2013). On appeal, the

Court of Appeals affirmed the Commission in a divided opinion. The majority held

that the Commission’s binding findings of fact show that plaintiff’s inability to find

work was not due to his injury, but rather to large-scale economic factors. Id. at

___, 748 S.E.2d at 347. Because we agree that plaintiff has not shown that his

inability to earn the same wages as before his injury resulted from his work-related

injury, we affirm.

Background

Plaintiff graduated from North Carolina State University in 1974 with a

degree in civil engineering. Since then he has worked in the commercial

construction industry in several different capacities, including as a project engineer,

supervisor, project manager, and estimator. In April of 2006, defendant Weaver

hired plaintiff and he worked for the company as both a project manager and an

estimator. Id. at ___, 748 S.E.2d at 344. As an estimator, plaintiff helped Weaver

obtain construction jobs by pricing the estimate to ensure that those jobs could be

completed under budget; this job was sedentary, but required that plaintiff be able

to lift and carry up to ten pounds occasionally. As a project manager, plaintiff

actually managed the construction projects; this job was at least slightly more

physically demanding than the estimator position.

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Plaintiff injured his right shoulder in May 2008 while helping to move a large

credenza, then exacerbated the injury later that day when moving a fifty pound box

of files. See id. at ___, 748 S.E.2d at 344. After this injury, he continued to work for

Weaver until 21 November 2008, when he was terminated as part of widespread

layoffs both within the company, and within the construction industry as a whole.

See id. at ___, 748 S.E.2d at 344. The reason given for plaintiff’s layoff was

“reduction of staff due to lack of work.” Id. at ___, 748 S.E.2d at 344. On 22

December 2008, after plaintiff was laid off, Weaver accepted his injury as

compensable and submitted Industrial Commission Form 60. Id. at ___, 748 S.E.2d

at 344. In January 2009, plaintiff began to receive unemployment benefits from

defendants; the next month, he began to receive temporary total disability

payments as well. Id. at ___, 748 S.E.2d at 344-45. These overlapping benefits

continued until late March 2011. Id. at ___, 748 S.E.2d at 345.

Starting in late 2008, plaintiff began medical treatment for his shoulder,

primarily at the hands of Raymond Carroll, M.D., and Kevin Speer, M.D. See id. at

___, 748 S.E.2d at 345. Dr. Carroll performed surgery on plaintiff’s shoulder on 10

February 2009, and plaintiff began physical therapy. Id. at ___, 748 S.E.2d at 345.

However, plaintiff’s shoulder pain worsened until he was discharged from therapy

in April 2009. Id. at ___, 748 S.E.2d at 345. An MRI conducted late in 2009 showed

that plaintiff may have suffered a superior labral tear to his shoulder; but because

this tear was not present at the time of the surgery performed earlier that year, Dr.

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Carroll concluded that it had not been caused by the May 2008 work injury. Both

Dr. Carroll and Dr. Speer eventually placed plaintiff at maximum medical

improvement, though plaintiff was assigned permanent work restrictions

preventing him from lifting weights greater than ten pounds, climbing ladders, or

performing repetitive overhead activities. Id. at ___, 748 S.E.2d at 345.

During the period following his layoff, plaintiff sought employment within

the construction industry. Although he estimated that he made hundreds of job

inquiries, plaintiff was unable to find equivalent work in that industry. Id. at ___,

748 S.E.2d at 345. Eventually, on 22 December 2010, defendants filed an

“Application to Terminate Payment of Compensation,” alleging that plaintiff could

no longer show that he was disabled. Id. at ___, 748 S.E.2d at 345. More

specifically, defendants argued that plaintiff could not show that he was legally

disabled because his inability to find another position as an estimator was due to

the economic downturn, rather than to any physical limitations. Id. at ___, 748

S.E.2d at 345.

Deputy Commissioner Philip A. Baddour, III heard this matter on 17 May

2011, and subsequently received the depositions of Dr. Speer, Dr. Carroll, Sandy J.

Kimmel, D.O., and vocational case manager Gregory Henderson. The Deputy

Commissioner denied plaintiff’s claim for disability compensation after 22

December 2010, and awarded defendants a credit for all unemployment benefits

plaintiff received during the time he also received disability compensation. Plaintiff

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appealed to the Full Commission.

The Full Commission heard the case on 4 September 2012. The Commission

considered the parties’ stipulations, several exhibits, and the testimony of several

witnesses, including plaintiff, Dr. Carroll, Dr. Speer, Dr. Kimmel, and Mr.

Henderson. Based on that evidence, the Commission made the following relevant

findings of fact:

1. Plaintiff holds a Bachelor[ ] of Science degree in
civil engineering. Since graduating in 1974, he has
worked for several general contractors in the commercial
construction context. Specifically, he has worked as a
Project Engineer, Supervisor, Senior Estimator, and
ultimately as a Project Manager on construction projects
involving hospitals, prisons, and schools, among other
things.

....

5. Plaintiff was laid off by Defendant-Employer on
21 November 2008 due to a reduction in Defendant-
Employer’s staff secondary to a lack of available work.
This lack of available work experienced by Defendant-
Employer is part of a larger economic downturn which
has adversely affected the construction industry as a
whole. In the parties’ Pre-Trial Agreement, the parties
stipulated that “Plaintiff continued working following the
injury and was laid off due to lack of work on November
21, 2008.”

....

10. On 20 May 2009, Dr. Carroll discharged
Plaintiff from his care and released him to return to work
without restrictions.

11. Plaintiff’s medical care was subsequently

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transferred to Dr. Kevin Speer, an orthopaedic surgeon . .
. . On 23 July 2009, Dr. Speer restricted Plaintiff from
lifting over ten (10) pounds or engaging in repetitive
overhead activities.

12. In late 2009, an MRI arthrogram of Plaintiff’s
right shoulder showed evidence of a possible superior
labral tear which was not present at the time of the
February 2009 surgery. Because the potential tear was
not present in February 2009, Dr. Carroll opined to a
reasonable degree of medical certainty that the tear was
unrelated to the May 2008 work injury. Dr. Carroll
further opined that it may be related to the weightlifting
engaged in by Plaintiff following the February 2009
surgery.

....

22. Following his layoff, Plaintiff sought
subsequent employment within the construction industry.

23. The position of Estimator is classified as a
sedentary duty job by the Dictionary of Occupational
Titles.

24. On 21 June 2010, VocMed conducted a job
analysis for Plaintiff’s pre-injury Estimator position. The
analysis indicated that the job required lifting and
carrying up to ten (10) pounds on an occasional basis.

25. On 18 November 2010, Gregory B. Henderson, a
vocational case manager and President of VocMed,
conducted a targeted labor market survey in which two
employers in the commercial construction industry of
similar size and geographic location confirmed that
someone with Plaintiff’s restrictions was physically
capable of performing the job duties required by the
Estimator position.

26. In an updated labor market survey conducted
by Mr. Henderson on 18 July 2011, an additional three

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employers confirmed that someone with Plaintiff’s
restrictions was physically capable of performing the job
duties required by the Estimator position.

27. Mr. Henderson offered testimony as an expert
in the field of vocational rehabilitation. Mr. Henderson
opined that Plaintiff has the vocational skills and physical
capabilities needed to perform work as an Estimator. He
further opined that Plaintiff would be able to return to
work as an Estimator, but for the current economic
downturn.

28. Eddie Carroll, Defendant-Employer’s Senior
Vice President of Pre-Construction, testified that Plaintiff
could perform each of the regular duties of the Estimator
position within his current restrictions.

Based on these findings of fact, the Commission concluded that plaintiff was

not entitled to any disability payments made after 22 December 2010 (the date

defendants filed the application to terminate payments), and that defendants were

entitled to a credit for any payments they had made after that date. More

specifically, the Full Commission made the following relevant conclusions of law:

2. In order to meet the burden of proving disability,
Plaintiff must prove that he was incapable of earning pre-
injury wages in either the same or in any other
employment and that the incapacity to earn pre-injury
wages was caused by Plaintiff’s injury. A Plaintiff is
unable to meet their burden of proving disability where,
but for economic factors, the employee is capable of
returning to his pre-injury position.

3. Plaintiff would be capable of returning to work
as an Estimator with either Defendant-Employer or a
competitor company, but for the current economic
downturn affecting both Defendant-Employer as well as
the construction industry as a whole. As such, any lost

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wages Plaintiff experienced from 22 December 2010 to the
present are attributable to large-scale economic factors
and are unrelated to Plaintiff’s May 2008 work injury.
Accordingly, Plaintiff cannot establish disability
secondary to his work-related injury at any time from 22
December 2010 to the present, and therefore Defendants
are entitled to terminate disability compensation.

4. Defendants are entitled to a credit for temporary
total disability compensation paid to Plaintiff after 22
December 2010 (the date of Defendants’ . . . Application to
Terminate Compensation) through the date of
termination.

(citations omitted). From this opinion and award, plaintiff appealed.

In a divided opinion, the Court of Appeals affirmed the Full Commission. Id.

at ___, 748 S.E.2d at 347. The majority did not apply its own precedent, Russell v.

Lowe’s Product Distribution, 108 N.C. App. 762, 425 S.E.2d 454 (1993). Instead, it

emphasized that, under this Court’s opinion in Hilliard v. Apex Cabinet Co., 305

N.C. 593, 290 S.E.2d 682 (1982), a plaintiff seeking to establish disability must

show that his inability to earn the same wages as before the injury was a result of

his work-related injury. As such, the majority reasoned, the Commission’s finding

that “the only reason plaintiff is unable to find employment was based on the

economic downturn and was not related to his injury” was sufficient to defeat

plaintiff’s disability claim. ___ N.C. App. at ___, 748 S.E.2d at 347. The dissenting

opinion, in contrast, pointed to Russell and would have held that proving disability

by one of the Russell methods also necessarily proves the causation requirement

described in Hilliard. Id. at ___, 748 S.E.2d at 348 (Geer, J., dissenting). The

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dissent also concluded that plaintiff had proved disability through the second

Russell method by providing evidence showing that he was capable of some work,

but was unable, after reasonable efforts, to obtain employment. Id. at ___, 748

S.E.2d at 349. We now turn to the substance of this disagreement.

The Applicable Law

We note and reaffirm that in Hilliard this Court held that under the

Workers’ Compensation Act, a claimant seeking disability must establish that his

inability to find work was “because of” his work-related injury. N.C.G.S. § 97-2(9)

(2013). On the record before us, plaintiff failed to do so, and so we affirm the

decision of the Court of Appeals.

Since the Workers’ Compensation Act was first enacted in 1929, the General

Assembly has defined the term “disability” as “incapacity because of injury to earn

the wages which the employee was receiving at the time of injury in the same or

any other employment.” Id. §§ 97-2(9) (2013), -2(i) (1930). This definition, we have

long and consistently held, specifically relates to the incapacity to earn wages,

rather than only to physical infirmity. See, e.g., Hendrix v. Linn-Corriher Corp., 317

N.C. 179, 186, 345 S.E.2d 374, 378-79 (1986); Fleming v. K-Mart Corp., 312 N.C.

538, 541, 324 S.E.2d 214, 216 (1985). In Hilliard, we articulated again the three

factual elements that a plaintiff must prove to support the legal conclusion of

disability:

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We are of the opinion that in order to support a
conclusion of disability, the Commission must find: (1)
that plaintiff was incapable after his injury of earning the
same wages he had earned before his injury in the same
employment, (2) that plaintiff was incapable after his
injury of earning the same wages he had earned before his
injury in any other employment, and (3) that this
individual’s incapacity to earn was caused by plaintiff’s
injury.

305 N.C. at 595, 290 S.E.2d at 683 (citation omitted). The burden of proving the

existence and extent of a disability is generally carried by the claimant. Clark v.

Wal-Mart, 360 N.C. 41, 43, 619 S.E.2d 491, 493 (2005) (citing Hendrix, 317 N.C. at

185, 345 S.E.2d at 378).

In Russell v. Lowe’s Product Distribution, the Court of Appeals applied

Hilliard to a worker’s compensation claim that arose when the claimant fell from

the top of a row of boxes while unloading a truck. See 108 N.C. App. at 762, 425

S.E.2d at 455. The Court of Appeals cited Hilliard for the proposition that the

claimant must prove the existence and extent of his disability. See id. at 765, 425

S.E.2d at 457. It then went on to describe four methods by which a claimant could

meet that burden:

The burden is on the employee to show that he is
unable to earn the same wages he had earned before the
injury, either in the same employment or in other
employment. The employee may meet this burden in one
of four ways: (1) the production of medical evidence that
he is physically or mentally, as a consequence of the work
related injury, incapable of work in any employment; (2)
the production of evidence that he is capable of some
work, but that he has, after a reasonable effort on his

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part, been unsuccessful in his effort to obtain
employment; (3) the production of evidence that he is
capable of some work but that it would be futile because
of preexisting conditions, i.e., age, inexperience, lack of
education, to seek other employment; or (4) the production
of evidence that he has obtained other employment at a
wage less than that earned prior to the injury.
Id. (citations omitted).

Subsequently, the Court of Appeals has not applied Russell consistently. In

one line of cases, the Court of Appeals has held that satisfying one of the Russell

prongs satisfies two of the Hilliard elements, but not necessarily the causation

element. See, e.g., Helfrich v. Coca-Cola Bottling Co. Consol., ___, N.C. App. ___,

___, 741 S.E.2d 408, 413 (2013) (“A plaintiff may satisfy the first two prongs of the

Hilliard test through [proving one of the Russell prongs.]”); Heatherly v.

Hollingsworth Co., 211 N.C. App. 282, 292, 712 S.E.2d 345, 352-53 (“A plaintiff may

establish the first two elements through any one of four methods of proof [from

Russell.]”), disc. rev. denied, ___, N.C. ___, 717 S.E.2d 367 (2011); Graham v.

Masonry Reinforcing Corp. of Am., 188 N.C. App. 755, 759, 656 S.E.2d 676, 679

(2008) (“This Court has stated a claimant may prove the first two prongs of Hilliard

through [proving one of the Russell prongs.]”). In a second line of cases, however,

the Court of Appeals has held that satisfying one of the Russell prongs proves all

three Hilliard elements. See, e.g., Campos-Brizuela v. Rocha Masonry, L.L.C., 216

N.C. App. 208, 223, 716 S.E.2d 427, 438 (2011) (“[W]e now hold that proof of

disability under any one of the four prongs of the Russell test is sufficient to permit

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an award of disability benefits.”), appeal dismissed and disc. rev. denied, 366 N.C.

398, 732 S.E.2d 579 (2012); Nobles v. Coastal Power & Elec., Inc., 207 N.C. App.

683, 692, 701 S.E.2d 316, 323 (2010) (“The employee must prove that he is unable to

earn the same wages that he had earned before his injury, either in the same or

other employment, and that the diminished earning capacity is a result of the

compensable injury, a burden which he may meet in one of four ways [as stated in

Russell].” (citing Hilliard, 305 N.C. at 595, 290 S.E.2d at 683)); Barrett v. All

Payment Servs., Inc., 201 N.C. App. 522, 524-25, 686 S.E.2d 920, 923 (2009) (“An

employee may satisfy his burden under Hilliard in one of four ways . . . .”), disc. rev.

denied, 363 N.C. 853, 693 S.E.2d 915 (2010); Boylan v. Verizon Wireless, 201 N.C.

App. 81, 91, 685 S.E.2d 155, 161 (2009) (“In workers’ compensation cases, a

claimant ordinarily has the burden of proving both the existence of his disability

and its degree. The employee may meet this burden in one of four ways [as

described in Russell].” (citation and internal quotation marks omitted)), disc. rev.

denied, 363 N.C. 853, 693 S.E.2d 918 (2010). Given these divergent lines of cases,

there was support for both the majority and dissenting opinions here.

Hilliard was grounded explicitly in the statutory definition of disability in

section 97-2; Russell expanded upon, and perhaps diverged from, that grounding.

We reaffirm that a claimant seeking to establish that he is legally disabled must

prove all three statutory elements as explained in Hilliard. He may prove the first

two elements through any of the four methods articulated in Russell, but these

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methods are neither statutory nor exhaustive. In addition, a claimant must also

satisfy the third element, as articulated in Hilliard, by proving that his inability to

obtain equally well-paying work is because of his work-related injury. This

conclusion accords with the statutory definition of disability as the “incapacity

because of injury to earn the wages which the employee was receiving at the time of

injury in the same or any other employment.” N.C.G.S. § 97-2 (emphasis added).

Our determination here also squares with the long line of precedent from this Court

holding that the claimant must prove causation. See, e.g., Clark, 360 N.C. at 43-44,

619 S.E.2d at 492-93; Saums v. Raleigh Cmty. Hosp., 346 N.C. 760, 763, 487 S.E.2d,

746, 749 (1997); Hendrix, 317 N.C. at 185, 345 S.E.2d at 378.1

We now turn to the statutory “causation” element, as described in Hilliard.

As we noted earlier, this Court has frequently stated that the legal definition of

disability refers not solely to physical infirmity, but also to earning capacity. See,

e.g., Hendrix, 317 N.C. at 186, 345 S.E.2d at 378-79; Peoples v. Cone Mills Corp.,

316 N.C. 426, 434-35, 342 S.E.2d 798, 804 (1986) (“ ‘Under the Workmen’s

1 The only case from this Court holding to the contrary is Demery v. Perdue Farms,
Inc. In that case, the Court of Appeals held that proving one of the Russell prongs sufficed
to prove all three Hilliard elements. See Demery, 143 N.C. App. 259, 264-66 & n.1, 545
S.E.2d 485, 489-90 & n.1, aff’d per curiam 354 N.C. 355, 554 S.E.2d 337 (2001). Demery,
however, is readily distinguishable from this case. There, the disputed and dispositive
issue was whether the claimant had satisfied the first Russell method by producing
competent evidence showing that she was incapable of work in any employment. See id. at
264-67, 545 S.E.2d at 489-91. Whether her inability to find equally well-paying work was
caused by her work-related injury, versus some other factor or combination of factors, was
simply not in dispute. Accordingly, the implication in Demery that satisfying Russell
satisfies all three elements of Hilliard was dicta, and our holding today does not disturb the
ultimate result in that case.

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Compensation Act disability refers not to physical infirmity but to a diminished

capacity to earn money.’ ” (quoting Ashley v. Rent-A-Car Co., 271 N.C. 76, 84 155

S.E.2d 755, 761 (1967) (citations omitted))). Because the focus is on earning

capacity, broad economic conditions, as well as the circumstances of particular

markets and occupations, are undoubtedly relevant to whether a claimant’s

inability to find equally lucrative work was because of a work-related injury.

Whether in a boom or bust economy, a claimant’s inability to find equally lucrative

work is a function of both economic conditions and his specific limitations. Both

factors necessarily determine whether a specific claimant is able to obtain

employment that pays as well as his previous position; the Commission makes this

determination based on the evidence in the individual case.

Application Here

We now turn to the case at hand. We review an order of the Full Commission

only to determine “whether any competent evidence supports the Commission’s

findings of fact and whether the findings of fact support the Commission’s

conclusions of law.” Deese v. Champion Int’l Corp., 352 N.C. 109, 116, 530 S.E.2d

549, 553 (2000); see also N.C.G.S. § 97-86 (2013); Clark, 360 N.C. at 43, 619 S.E.2d

at 492; Adams v. AVX Corp., 349 N.C. 676, 681, 509 S.E.2d 411, 414 (1998).

Because the Industrial Commission is the “sole judge of the credibility of the

witnesses and the weight of the evidence[,] [w]e have repeatedly held that the

Commission’s findings of fact ‘are conclusive on appeal when supported by

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competent evidence, even though there be evidence that would support findings to

the contrary.’ ” Davis v. Harrah’s Cherokee Casino, 362 N.C. 133, 137, 655 S.E.2d

392, 394-95 (2008) (citations omitted) (quoting Jones v. Myrtle Desk Co., 264 N.C.

401, 402, 141 S.E.2d 632, 633 (1965) (per curiam)). In addition, where findings of

fact are not challenged and do not concern jurisdiction, they are binding on appeal.

See N.C.G.S. § 97-86 (“The award of the Industrial Commission . . . shall be

conclusive and binding as to all questions of fact . . . .”); see also McLean v. Roadway

Express, Inc., 307 N.C. 99, 102, 296 S.E.2d 456, 458 (1982) (“Except as to questions

of jurisdiction, the rule is that the findings of fact made by the Commission are

conclusive on appeal when supported by competent evidence.”). “The Commission’s

conclusions of law are reviewed de novo.” McRae v. Toastmaster, Inc., 358 N.C. 488,

496, 597 S.E.2d 695, 701 (2004) (citation omitted).

Plaintiff has challenged only Finding of Fact Number 24. Again, that finding

states:

24. On 21 June 2010, VocMed conducted a job
analysis for Plaintiff’s pre-injury Estimator position. The
analysis indicated that the job required lifting and
carrying up to ten (10) pounds on an occasional basis.

Plaintiff contends that this finding was not supported by competent evidence

because “[t]he undisputed evidence shows that Plaintiff’s primary job with

Defendant-Employer was Project Manager, not Estimator. Although he performed

some Estimator duties, Plaintiff was hired as a Project Manager and remained in

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that role until he was laid off.” Nonetheless, even if plaintiff were correct about his

primary duties, this contention does not undercut the finding of fact, which refers to

a vocational analysis of estimator positions. Moreover, based on our review of the

record submitted to the Full Commission, we hold that this finding was supported

by competent evidence. Because plaintiff has challenged only this specific finding,

all the Commission’s findings are binding on appeal. See McLean, 307 N.C. at 102,

296 S.E.2d at 458.

We also hold that these findings support the legal conclusion that plaintiff

has not met his burden of showing that he is entitled to disability compensation.

The findings of fact quoted above establish, among other things, that any

limitations because of a superior labral tear were likely not caused by plaintiff’s

work-related injury. The Commission properly concluded, based on the evidence

presented, that plaintiff has not proved that his inability to find equally lucrative

work is because of his work-related injury. See N.C.G.S. § 97-2. Accordingly, we

affirm the decision of the Court of Appeals.

AFFIRMED.

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