What a Recent Court Decision Could Mean for Dismissing Workers’ Compensation Claims with Prejudice
North Carolina Supreme Court remands Lauziere v. Stanley Martin Communities, LLC, 376 N.C. 789, 854 S.E.2d 579 (2021) to the Full Commission for further findings.
In a recent decision issued by the North Carolina Supreme Court, the judges remanded a case back to the Full Commission where a plaintiff’s case was dismissed with prejudice for failure to prosecute.
Background of the Case
Plaintiff was employed as a realtor and allegedly sustained an injury while trying to manually shut a garage door at a model home. Defendants denied Plaintiff’s claim. Plaintiff’s case was originally set to be heard in May 2016, but the case was continued because Plaintiff had not responded to discovery. On June 16, 2016, Plaintiff produced discovery responses to Defendants and asked to be placed on an expedited hearing docket. Defendants alleged Plaintiff’s discovery responses were insufficient. Over a year later, Defendants moved to dismiss the claim with prejudice. The Commission filed an Opinion and Award, dismissing Plaintiff’s case with prejudice pursuant to Industrial Commission Rule 616(b). Plaintiff appealed to the Full Commission, and the Full Commission affirmed the decision.
The sole issue on appeal to the Court of Appeals was whether the Commission erred in dismissing Plaintiff’s claim with prejudice. The Court of Appeals looked to North Carolina Civil Procedure Rule 41(b) for guidance and noted that the Commission must address three factors before it can dismiss a workers’ compensation claim for failure to prosecute under Rule 616(b). First, “whether the plaintiff acted in a manner which deliberately or unreasonably delayed the matter.” Lee v. Roses, 162 N.C. App 129, 132, 590 S.E.29 404, 407 (2004). Second, “the amount of prejudice, if any, to the defendant caused by the plaintiff’s failure to prosecute.” Id. Third, “the reason, if one exists, that sanctions short of dismissal would not suffice.” Id. at 133, 590 S.E.2d at 407.
The Court of Appeals found that the Commission erred on three grounds due to a lack of competent evidence. First, Defendants offered no competent evidence to support a finding that they had been materially prejudiced because they were unable to direct medical treatment since the claim was denied. Second, Defendants did not produce any evidence that supported their contention that they bore “substantial” expenses. Third, there was no evidence that Plaintiff could not have afforded to pay a monetary sanction, if so ordered, so the finding that Defendants’ monetary damages could not have been recouped was not supported by the evidence.
The Court of Appeals found that other, less permanent, sanctions remained available, such as civil contempt. The Full Commission’s order of dismissal was reversed, and the case was remanded to the Commission.
Judge Dillon concurred in part and dissented in part. While not all of the Commission’s findings were supported by the evidence, he believed that the remaining findings were sufficient to support a dismissal in the exercise of the Commission’s discretion. However, he could not conclude that the Commission would have reached the same result based on the remaining findings. Therefore, he voted to vacate the dismissal, remand the matter for further proceedings, and allow the Commission, in its discretion, to order dismissal or lesser sanctions.
Defendants appealed to the North Carolina Supreme Court. The Court remanded the case to the Full Commission to review the award, and as it deems necessary, reconsider the evidence, receive further evidence, rehear the parties or their representatives, and, if proper, amend the Award.
Implications for Defendants
We will continue to monitor this case to determine the implications it has on the evidence defendants need to present in order to successfully secure a dismissal with prejudice. The Commission will likely be reluctant to dismiss a claim with prejudice, so defendants must carefully document and present evidence that plaintiff deliberately or unreasonably delayed the matter, that defendants were prejudiced by plaintiff’s actions, and that no other sanctions short of dismissal would suffice. Such evidence may include documentation of how the delay impaired defendants’ ability to locate witnesses, medical records, treating physicians, or other data; how much money defendants expended, how often they traveled, or how far they traveled to litigate the claim; and financial documentation or other evidence to show why defendants’ costs could not be recouped from plaintiff.