Parker v. Thompson-Arthur Paving Co.

396 S.E.2d 626, 100 N.C. App. 367, 1990 N.C. App. LEXIS 982

• Court: Court of Appeals of North Carolina
• Decided: October 2, 1990
• Docket: 8910IC1400
• Status: Published

Opinion

JOHNSON, Judge.

Although defendants bring forth two issues, they are subsumed into one issue on appeal: whether the Industrial Commission erred in concluding: (a) that defendants are equitably estopped from pleading the two year time limit for filing under G.S. § 97-24(a) as a bar to jurisdiction, and (b) that plaintiff detrimentally relied as a matter of law on statements of defendant’s agent.

The jurisdiction of the Industrial Commission is limited by statute. Letterlough v. Atkins, 258 N.C. 166, 128 S.E.2d 215 (1962). “The right to compensation under [the Workers’ Compensation Act] shall be forever barred unless a claim be filed with the Industrial Commission within two years after the accident.” G.S. § 97-24(a). The two year limitation has repeatedly been held to be a condition precedent to the right to compensation and not a statute of limitations. Montgomery v. Horneytown Fire Dept., 265 N.C. 553, 144 S.E.2d 586 (1965); Weston v. Sears Roebuck & Co., 65 N.C. App. 309, 309 S.E.2d 273 (1983), disc. rev. denied, 311 N.C. 407, 319 S.E.2d 281 (1984); Belfield v. Weyerhaeuser Co., 77 N.C. App. 332, 335 S.E.2d 44 (1985). A consequence of finding the timely filing of a claim to be a condition precedent is that the failure to do so becomes a jurisdictional bar to the right to receive compensation. McCrater v. Engineering Co., 248 N.C. 707, 104 S.E.2d 858 (1958); Barham v. Kayser-Roth Hosiery Co., 15 N.C. App. 519, 190 S.E.2d 306 (1972); Weston v. Sears Roebuck & Co., supra. The general rule is that a jurisdictional bar cannot be overcome by consent of the parties, by waiver or by estoppel. Hart v. Motors, 244 N.C. 84, 92 S.E.2d 673 (1956); Clodfelter v. Furniture Co., 38 N.C. App. 45, 247 S.E.2d 263 (1978). Prior to the 1985 decision in Belfield v. Weyerhaeuser Co., supra, the question was unresolved whether “under all circumstances a party to a proceeding before the Industrial Commission can, or cannot, be estopped to attack its jurisdiction over the subject matter. . . .” Hart v. Motors, supra. In Belfield v. Weyerhaeuser Co. this Court faced the question squarely and held that a party could be equitably estopped from asserting the two year time limitation in G.S. § 97-24 as a bar to jurisdiction.

While dicta in Weston v. Sears Roebuck & Co. (“[Previous cases] suggest that the jurisdictional bar created by a failure to file a timely claim may be overcome on a theory of equitable estop-pel where facts indicate intentional deception of the employee by the employer.” Weston v. Sears Roebuck & Co. at 313, 309 S.E.2d at 276.) and the Belfield decision indicate that estoppel may be applied in compensation cases where intentional deception is found, the question remains whether estoppel may apply on facts which are less egregious.

“The law of estoppel applies in compensation proceedings as in all other cases.” Biddix v. Rex Mills, 237 N.C. 660, 665, 75 S.E.2d 777, 781 (1953). The essential elements of estoppel are (1) conduct on the part of the party sought to be estopped which amounts to a false representation or concealment of material facts; (2) the intention that such conduct will be acted on by the other party; and (3) knowledge, actual or constructive, of the real facts. The party asserting the defense must have (1) a lack of knowledge and the means of knowledge as to the real facts in question; and (2) relied upon the conduct of the party sought to be estopped to his prejudice. In re Will of Covington, 252 N.C. 546, 114 S.E.2d 257 (1960). In Hawkins v. Finance Corp., 238 N.C. 174, 77 S.E.2d 669 (1953), our Supreme Court added the following language to the first element: “([c]onduct) ... at least, which is otherwise than, and inconsistent with, those which the party afterwards attempts to assert.” Id. at 177, 77 S.E.2d at 672.

This view of equitable estoppel was recently applied in Meachum v. Board of Education, 59 N.C. App. 381, 297 S.E.2d 192 (1982), disc. rev. denied, 307 N.C. 577, 299 S.E.2d 651 (1983). In Meachum v. Board of Education, plaintiff schoolteacher experienced severe medical problems which interfered with her teaching. She applied for and took disability retirement benefits on the recommendation of the school finance officer who assured her that “the retirement aspect was just a formality because the state regulations provide that the benefits stop automatically when one returns to work.” Id. at 384, 297 S.E.2d at 193. However, when she attempted to return to work she was, for the first time, informed that disability retirement was tantamount to a resignation. Defendant’s agents, at the time they made their assurances, were unaware that by taking retirement disability plaintiff would be adversely affecting her status as a career teacher. Plaintiff was similarly unaware of this and had made no attempt to investigate. The Meachum Court held that defendants were estopped to deny plaintiff her status as a “career teacher” where their assurances were reasonably calculated to convey to her the impression that filing for disability retirement benefits was a suitable option for her to pursue in her circumstances, this impression of the facts was wholly inconsistent with defendant’s later assertion, and the conduct “conveyed the impression that plaintiff would not lose any status previously obtained despite the lack of an affirmative promise that plaintiff would be rehired.” Id. at 386, 297 S.E.2d at 196. It was undisputed that both plaintiff and defendants acted in good faith and that when defendants gave the assurances to plaintiff they were unaware of the true facts. In finding that defendants were estopped by their conduct, the Meachum Court relied on Hamilton v. Hamilton, 296 N.C. 574, 251 S.E.2d 441 (1979), where a plaintiff wife was allowed a claim of estoppel based on defendant husband’s innocent, but misleading, representations and conduct. The Hamilton Court noted that “neither bad faith, fraud nor intent to deceive is necessary before the doctrine of equitable estoppel can be applied.” Hamilton v. Hamilton, 296 N.C. at 576, 251 S.E.2d at 443. Furthermore, the Court quoted with approval:

“[A] party may be estopped to deny representations made when he had no knowledge of their falsity, or which he made without any intent to deceive the party now setting up the estoppel. . . . [T]he fraud consists in the inconsistent position subsequently taken, rather than in the original conduct. It is the subsequent inconsistent position, and not the original conduct that operates to the injury of the other party.”

Id. at 576-77, 251 S.E.2d at 443, quoting H. McClintock, Equity § 31 (2d ed. 1948).

We hold that under the facts of this case, defendants are estopped from asserting the two year time limit as a defense to plaintiff’s claim. Plaintiff was injured on 8 November 1985. Defendant was immediately made aware of the injury. Defendant paid plaintiff’s medical expenses in 1985, 1986 and 1987. In a face-to-face meeting between plaintiff and his employer’s agent in August, 1987, still within the two year period for filing, plaintiff advised the agent of his plans to have corrective surgery in December, 1987, during the annual layoff period. The agent’s response was that this “would be fine” but that the proposed concurrent surgery on the hand to correct a previous unrelated injury would not be covered by Workers’ Compensation. The agent’s verbal acquiescence to plaintiff’s proposed surgery made in a face-to-face meeting, the fact that it was planned to occur at a future time which would be of benefit to both employer and plaintiff in terms of work schedule, and the specific reference to Workers’ Compensation with regard to the hand, reasonably led plaintiff to believe that the surgery would be covered by Workers’ Compensation. Defendant is estopped to now assert that it is not.

Defendants are correct in their contention that mere payment of medical benefits does not constitute estoppel under G.S. § 97-24(a). Biddix v. Rex Mills, 237 N.C. 660, 75 S.E.2d 777 (1953); Barham v. Kayser-Roth Hosiery Co., 15 N.C. App. 519, 190 S.E.2d 306 (1972). In the case sub judice, almost two years of voluntary medical benefit payments were made by the employer without controversy. This was followed by a conversation in which the employer’s agent specifically advised plaintiff as to the nonapplication of Workers’ Compensation to cover future surgery on his hand but in that same conversation remained silent with regard to coverage of the proposed concurrent shoulder surgery, which surgery was the specific subject matter of the conversation. Thus, while acquiescing in the future date of that surgery, which was planned for a date beyond the statutory period, defendant undertook to advise plaintiff with regard to Workers’ Compensation coverage in such a way that plaintiff was misled to his detriment. This occurred at a time when plaintiff still could have complied with the statutory requirements for filing. A reasonable person in plaintiff’s position would have inferred from this conversation that his shoulder surgery would be covered. It is not necessary to show, and we do not imply, that defendant was specifically aware, at the time of the conversation, that the surgery would occur outside the statutory period or that defendant deliberately tried to mislead plaintiff as to the coverage. Hamilton v. Hamilton, supra.

The award of the Industrial Commission is

Affirmed.

Judges Phillips and Parker concur.