Johnson v. Covil Corp. - 212 N.C. App. 407, 711 S.E.2d 500 (2011)

Rule:

Where the incapacity for work resulting from the injury is total, the employer shall pay or cause to be paid, as hereinafter provided, to the injured employee during such total disability a weekly compensation equal to sixty-six and two-thirds percent (66 ⅔ %) of his average weekly wages, but not more than the amount established annually to be effective October 1 as provided herein, nor less than thirty dollars ($30.00) per week. If death results from the injury then the employer shall pay compensation in accordance with the provisions of G.S. 97-38. Notwithstanding any other provision of N.C. Gen. Stat. § 97-29, on July 1 of each year, a maximum weekly benefit amount shall be computed and this said maximum weekly benefit shall be applicable to all injuries and claims arising on and after January 1 following such computation. 

Facts:

Russell Lee Johnson ("decedent") worked for Covil Corporation in various capacities from 1957 to 1987. Covil was an insulation company that used asbestos on many of its sites. Decedent began his career as an insulator, installing and removing asbestos insulation, and gradually moved up from foreman to President of Covil. In 1987, decedent retired from Covil and in 1989 he served as Chief Executive Officer ("CEO") of an insulation company started by his son-in-law. As CEO of his son-in-law's company, he served as a figurehead without receiving any compensation. In late 2005, decedent began experiencing abdominal pain. The following February he was diagnosed with cancer of the peritoneum membrane, which forms the lining of the abdominal cavity. Biopsies were taken, indicating that it was peritoneal mesothelioma, a rare cancer only caused by asbestos. The biopsies also established that decedent had extensive pleural plaquing and fibrotic scarring on his lungs, related to the asbestos exposure. On 5 June 2006, decedent filed a claim for benefits with the Industrial Commission based on asbestos exposure, pleural disease, and mesothelioma. Decedent suddenly died the next day as a result of mesothelioma, lung fibrosis, and septic shock.

On 3 October 2006, plaintiff Edith Johnson, as widow and sole dependent of decedent, filed an amended form with the Industrial Commission seeking death benefits. The Commission determined that decedent's death was the result of his occupational exposure to asbestos and awarded benefits to plaintiff using the maximum compensation rate for 1987 of $308.00. Edith filed a Motion to Amend or Reconsider the Order based on the maximum compensation rate used. The Commission denied the Motion.

Issue:

Did the Commission err in computing the average weekly wages of decedent based on his 1987 wages?

Answer:

Yes.

Conclusion:

As the clear language of section 97-29 provides, the maximum compensation rate for a given year shall apply to all injuries and claims arising on or after 1 January following the computation of that year's compensation rate. See id. In cases involving occupational diseases, the claim arises when the disease is diagnosed. Here, decedent's asbestosis and mesothelioma were diagnosed in 2006, which corresponds with the 2006 maximum compensation rate of $730.00. Although the proper year for determining decedent's average weekly wages is 1987, N.C. Gen. Stat. § 97-29 does not provide an unjust result, but requires that the maximum compensation rate for 2006 be used, as that was the year of decedent's diagnosis.