What happens when an employer and its workers’ compensation insurer deny a claim, then face a wrongful death tort suit, then attempt to have the comp claim reinstated, going so far as to pay weekly wage amounts to the deceased worker’s husband?
In the case of a North Carolina furniture maker and FFVA Mutual Insurance Co., it results in sanctions imposed by the state Court of Appeals.
The furniture company’s “appeal is ‘not well-grounded in fact,’ is ‘not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law,’ and has been taken ‘to harass [and] cause unnecessary increase in the cost of litigation,’” the appellate judges wrote in their July 2 order, citing case law from previous court rulings.
TCS Designs Inc., based in Hickory, North Carolina, and FFVA Mutual, based in Florida and Virginia, must now cover the cost of the appeal and pay the plaintiff’s attorney fees in the four-year-old litigation.
The appeals court noted that the circumstances of the appeal were so unusual that they were not directly addressed by the state’s workers’ compensation statutes or the rules of the Industrial Commission. Instead, the court turned to its own rules of civil procedure to show that a voluntary dismissal of the claim strips the Industrial Commmission of its jurisdiction – allowing the wrongful death lawsuit to proceed.
“Defendants did not and could not create jurisdiction in the Commission after Plaintiff’s claim had been dismissed, by filing the Form 60 and sending weekly compensation checks to Plaintiff,” the appeals court.
The tragic case began in 2021, when TCS factory worker Phelifa Michelle Marlow asked a co-worker, Tangela Parker, to stop singing so loudly at work. The two had locked horns before and Parker in 2020 had been suspended from the job for three days. This time, however, Parker went to her car in the parking lot, grabbed a gun and shot Marlow twice in the head from point-blank range, the court explained.
The case gained nationwide attention. People Magazine reported on it after Parker went on the run and became the subject of a six-month long manhunt. She was apprehended in Arizona with her husband and was sentenced in 2024 to at least 20 years in prison. Husband Eric Parker pleaded guilty to helping his wife evade justice and was sentenced to at least 48 months, according to news reports.
After the fatal shooting, Marlow’s husband in 2021 filed a workers’ comp claim for death benefits. The employer/carrier denied the claim, arguing that while the shooting happened at work, it was not related to Marlow’s employment and was not compensable.
After hearings and mediation, Marlow’s husband voluntarily dismissed the comp claim. Four days later, he filed a wrongful death lawsuit against the TCS company, charging negligence by the company and its supervisors. Two months later, TCS and FFVA reversed course and filed an “employer’s admission of employee’s right to compensation,” known as Form 60.
FFVA, which also provided employer’s liability coverage to the furniture firm, began sending weekly checks to Justin Marlow, the husband. North Carolina workers’ compensation act grants $10,000 in burial benefits plus two-thirds of the deceased workers’ average weekly wage, for as long as 500 weeks. A spouse’s benefits end upon death or remarriage, according to the Workers’ Compensation Research Institute’s latest report on state laws and benefits.
In June 2022, the Industrial Commission denied the TCS motion to reopen the claim and accept compensability. The carrier and employer appealed and moved to dismiss Justin Marlow’s wrongful death tort suit. A trial court judge denied the motion to dismiss.
Michelle Marlow’s husband had never cashed the checks that FFVA had been sending to him for months. The checks remained with his attorney.
The insurer argued that by sending the benefits checks, it had effectively awarded the compensation and had accepted the claim, keeping the case inside the folds of the limited payouts of the workers’ comp system, not the millions of dollars that could be awarded in a civil suit.
The appellate judges found that FFVA’s arguments were meritless.
“Because the (Industrial) Commission did not have subject matter jurisdiction over the claim, the Form 60 (admitting the claims) was nothing more than a nullity,” the appeals court noted.
At one point, FFVA asked the North Carolina Supreme Court to step in and review one ruling from the appeals court in the case, but the high court declined to get involved. And the employer/carrier continued to submit forms and filings to the Industrial Commission, forcing the commission to repeatedly explain that it lacked jurisdiction after the claim was dismissed.
All of the back and forth was unneccessary and frivolous and should be sanctioned, Marlow’s attorneys argued. The appeals court agreed. It remanded the case to the trial court to determine attorney fees and costs, to be paid by the employer and insurer.
Marlow’s estate was represented by attorneys David Stradley, of the White & Stradley law firm; and by Lyndon Helton. TCS and FFVA were represented by Scott Fuller and Steven Bader, of the Cranfill Sumner firm.
The wrongful death suit against TCS and its officers and against Parker’s husband is continuing.
Topics
Carriers
Workers’ Compensation
North Carolina
