N.C. Supreme Court to Review Decision On Alteration of Agreements

Late last year, the North Carolina Court of Appeals heard a case wherein two workers' compensation claimants brought an action against their employer and insurer, alleging fraud, unfair and deceptive trade practices, intentional infliction of emotional distress, bad faith refusal to pay or settle a valid claim and civil conspiracy. In part, that case arose out of allegations that the defendants made material alterations to an I.C. Form 21 agreement which one of the claimants had signed, that they deliberately concealed those alterations from the claimant and her attorney, and that the defendant carrier submitted the altered Form 21 to the Commission for approval. On October 6, 1998, the Court of Appeals ruled that the trial court had properly granted defendants' motion to dismiss, as the Workers' Compensation Act provided the exclusive remedy for the employees' claims. The Court also ruled that the Industrial Commission was authorized to deal with matters such as the fraud alleged. On April 14, the Supreme Court heard oral arguments in that case after accepting the matter on discretionary review.

Risk Handling Hint: Although no final decision has yet been rendered in this case, it evidences the serious consequences that may occur if an agreement for compensation is in any way altered after the claimant has signed it. Should the Supreme Court's decision in any way alter the decision of the Court of Appeals, or otherwise alter the general rule that the Workers' Compensation Act provides the exclusive remedy for claims, we will report the decision in a future issue of Risk/Alert.