State News : North Carolina

NC Risk Handling Hint -Setting Aside a Form 60

Dennis Ray Spivey was employed by Wright’s Roofing as a laborer for approximately three years. Wright’s
Roofing contracted with AMS Staff Leasing, who provided workers’ compensation coverage for its employeeswhose employment had been reported to AMS. Spivey completed forms required by AMS and AMS issued his paychecks. Plaintiff stopped working for Wright’s Roofing and a Wright’s Roofing representative submitted termination forms to AMS noting that Spivey was no longer employed by Wright’s Roofing. A year later, Spivey resumed his employment with Wright’s Roofing but did not complete AMS staffing forms. Instead, Spivey was paid with checks drawn on a Wright’s Roofing account.

One day, Spivey was injured as he worked on a residential job in which Boyet Builders was the general contractor and Wright’s Roofing was the subcontractor. Spivey filed a Form 18 and AMS Staff Leasing, Dallas National Insurance, Co., and Crawford & Company (hereinafter “Defendants”) filed a Form 60 and began paying weekly disability benefits. Shortly thereafter, Defendants determined that they had no Workers’ Compensation coverage applicable to Spivey, and filed Forms 63 and 61, denying liability and terminating benefits.

Spivey filed an amended Form 18 and a Form 33 in which he named Wright’s Roofing, Dallas National and Boyet Builders as responsible parties. Boyet Builders filed a Form 61 and a Form 33R and denied that Spivey was its employee at the time of the injury and asserted that Defendants had already accepted liability for benefits.

At hearing, Spivey moved that Defendants be ordered to reinstate TTD benefits and Deputy Commissioner Phillips allowed the motion. She later entered an Order holding Boyet Builders and Auto-Owners Insurance liable for Spivey’s injury and ordered them to pay indemnity and medical benefits. Boyet and Auto Owners appealed to the Full Commission. The Commission determined that Defendants had no legal basis to withdraw their Form 60 and ordered them to provide indemnity and medical benefits. Defendants appealed to the North Carolina Court of Appeals.

On January 15, 2013 inSpivey v. Wright’s Roofing, the Court first considered whether the Full Commission erred by refusing to allow Defendants to set aside the Form 60. Finding no error, the Court noted that an employer who files a Form 60 waives the right to contest the compensability of a claim on the basis of a unilateral mistake. According to the Court, the burden is on the employer or carrier to determine whether a particular claim is compensable and whether the employer or carrier is liable before filing a Form 60.

The Court also addressed the issue of whether the Full Commission erred in holding that Boyet Builders was not responsible for benefits pursuant to N.C.G.S.§ 97-19. The Court noted that N.C.G.S. § 97-19 applies only when two conditions are met. First, the injured employee must be working for a subcontractor doing work that has been contracted to it by a principal contractor. Second, the subcontractor does not have workers’ compensation insurance coverage covering the injured employee and since workers’ compensation insurance was available through Spivey’s immediate employer, Wright’s Roofing, because Defendants accepted the claim, there was no error.

Risk Handling Hint:Risk Managers are reminded to carefully consider whether a claim is compensable before accepting an injury on a Form 60. Benefits can be paid and medical treatment provided during the investigation period by filing a Form 63. If additional time is required to conduct an investigation, the employer and carrier can request a limited extension of time from the Industrial Commission.