Lewis v. N.C. Department of Corrections – Mandatory Interest on Lump Sum Permanent Disability Award

The North Carolina Court of Appeals recently awarded interest on a lump sum permanent workers’ compensation disability award, finding state law mandated it under N.C.G.S. § 97 – 86.2. prison1.jpg

The statute indicates that in any workers’ compensation case in which the claimant is successful upon appeal, the company or its insurer “shall pay” interest on the final award or any unpaid portion from the date the claim was first made.

Our Asheville workers’ compensation attorneys know the key point in the statute, pertaining to the case of Lewis v. N.C. Department of Corrections, is “shall pay.”

The case first began in 1994, when employee first claimed work injury after being diagnosed with post-traumatic stress disorder. He was awarded temporary total disability benefits in 1996, as well as coverage of his medical treatments. An additional award was granted in 2003, with the full commission finding this condition was made worse by his pre-existing diabetes. He was given an additional payment to cover these related expenses. He continued to receive temporary total disability benefits until 2010, when he requested a hearing to receive permanent disability benefits.

A deputy commissioner ruled claimant reached maximum medical improvement in 2009, and was entitled to receive permanent benefits retroactive to then. Thus, he was awarded permanent partial disability benefits in a lump sum, minus the amount of temporary total disability benefits already paid.

On appeal, the full commission affirmed the award, with exception that part of it for non-listed body parts was slightly reduced. Plaintiff filed a motion to compel his employer to pay interest on the lump sum award, pursuant to the aforementioned statute.

The commission denied this request and subsequent request for reconsideration. The reasoning was that because interest was intended to compensate a worker for the loss of money to which he is entitled while an appeal is pending and because no benefit payments were past due between the time of appeal and the issuance of a final award, interest was not required.

Plaintiff appealed, arguing interest was owed from the date of the initial hearing in the dispute. The North Carolina Court of Appeals agreed, pointing to the portion of the law statute indicating an employer or insurer “shall pay interest on the final award or unpaid portion thereof.” The term “shall” is considered to mean such payments are required. When all other elements of the statute are met, the court ruled the commission has no discretion on whether to award interest – it must.

Plus, the purpose of imposing interest is to compensate the worker for the inability to access the award money while the appeal is pending. Here, claimant couldn’t access the full amount of his lump sum award until the final decision because it hadn’t been paid until the final decision was rendered.

The court ruled this was not an issue of duplicated benefits because the lump sum payment was for permanent disability award – not temporary disability, which was deducted from the final sum.

If you have been injured at work in Asheville, contact the Lee Law Offices at 800-887-1965.

Additional Resources:
Lewis v. N.C. Department of Corrections, June 17, 2014, North Carolina Court of Appeals

More Blog Entries
Gov. McCrory’s Appointment to N.C. Industrial Commission Sparks Ire, Sept. 6, 2014, Asheville Workers’ Compensation Lawyer Blog

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