Employee entitled to attorney's fees in appeal, but not as a sanction

The award of attorney's fees is permitted regardless of whether the employer had reasonable grounds for bringing the appeal.

Case name: D'Aquisto v. Mission St. Joseph's Health System, et al., No. COA08-1238 (N.C. Ct. App. 08/04/09).

Ruling: The North Carolina Court of Appeals ruled that the employee was entitled to appellate attorney's fees for time spent defending multiple appeals brought by the employer.

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What it means: In North Carolina, an injured employee may move for attorney's fees to be paid by the employer when: 1) the employer appeals the commission's order directing the employer to pay benefits; and 2) the order to pay benefits is affirmed. The award of attorney's fees is permitted regardless of whether the employer had reasonable grounds for bringing the appeal.

Summary: An employer appealed a decision by the industrial commission that awarded attorney's fees, and attorney's fees expended in an appeal after an initial award of compensation. The employer had unsuccessfully contested the award of disability and medical benefits multiple times. The employer argued that its defense to the employee's claim for benefits was found to be reasonable by the commission, and that such a finding precluded an award of attorney's fees according to North Carolina law.

The Court of Appeals rejected the argument, finding that the evaluation of "unreasonableness" was not a factor to be weighed when deciding to award attorney's fees in an appeal. The court explained that the unreasonableness determination only applied in initial hearings. This determination was intended to prevent frivolous or unfounded lawsuits contrary to the primary purposes of the Workers' Compensation Act, which is to provide compensation to injured employees. However, the award of attorney's fees can be granted when the employer is ordered to make, or continue payments of benefits, whether or not the employer who instituted the proceeding has reasonable grounds for bringing the appeal. Accordingly, the court affirmed the imposition of attorney's fees stating they were not assessed as a penalty, but for the costs of defending the appeal.

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September 28, 2009

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