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24758 - Joseph Kirkland v. Allcraft Steel Col, Inc., (Carolina v. SCE&G)

Davis Adv. Sh. No. 6
S.E. 2d


THE STATE OF SOUTH CAROLINA

In The Supreme Court

    In Re: Joseph Kirkland,

    Employee,         v.

    Allcraft Steel Co., Inc.,

    Employer,

    Carolina Associated of

    General Contractors Self-

    Insurance Trust fund of

    South Carolina,         Respondent,

    v.

    South Carolina Electric

    and Gas Company, Inc.,         Appellant

Appeal From Richland County

William P. Keesley, Judge

Opinion No. 24758

Heard February 20, 1997 - Filed February 9, 1998

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

Kay G. Crowe, of Barnes, Alford, Stork & Johnson, of
Columbia, for Appellant.
Hal Hanlin, of Callison, Tighe, Robinson & Hawkins of
Columbia, for Respondent.

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KIRKLAND v. ALLCRAFT (CAROLINA v. SCE&G)

        TOAL, A.J.: In this workers' compensation matter, South Carolina

Electric and Gas Company appeals the circuit court's decision requiring it to

fully satisfy the carrier's lien. We affirm in part, reverse in part, and

remand to the Workers' Compensation Commission.

Factual/Procedural Background

        While making repairs on the premises of his employer Allcraft Steel

Company, Joseph Kirkland ("Claimant") suffered serious permanent injuries

when he was electrocuted as he came in contact with an electric wire

maintained by appellant South Carolina Electric and Gas Company ("Third

Party"). Claimant's claim was accepted by his employer and its insurance

carrier respondent Carolina Associated ("Carrier"). Carrier paid Claimant

compensation and medical benefits in the amount of $27,837. Moreover, it

informed Third Party of its reservation of rights for subrogation of these

claims.

        Claimant also presented a claim against Third Party. Negotiations

were begun, and Third Party agreed to directly pay Claimant lump sums and

annuities valued at approximately $55,000 for a full release of the tort claim.

The settlement agreement acknowledged Carrier's lien on the settlement

proceeds. Third party agreed to be responsible for any carrier's lien due;

however, the settlement was reached without the knowledge or consent of

Carrier.

        Carrier filed a petition with the Workers' Compensation Commission

seeking enforcement of its lien. Third Party agreed to stipulate that it was

responsible for satisfying Carrier's lien. After a hearing, the single

commissioner issued an order holding that Carrier was entitled to the

amount of its $27,837 lien. The full commission affirmed the order, and the

circuit court affirmed the decision of the commission. Third Party has

appealed to this Court, arguing the circuit court erred in: (1) finding that

Third Party is required to reimburse Carrier for the full amount of its lien;

and (2) failing to order an equitable reduction of Carrier's lien.

Law/Analysis

A. REIMBURSEMENT FOR LIEN

        Third Party argues the circuit court erred in concluding that Third

Party is required to reimburse Carrier for its lien. We disagree.

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KIRKLAND v. ALLCRAFT (CAROLINA v.SCE&G)

        Third Party contends it is not required to reimburse Carrier for the full

amount of its lien because the lien created under S.C. Code Ann. § 42-1-

560(b) (1985)1 attaches to the proceeds paid and is not enforceable against

Third Party in a direct action. We find it unnecessary to interpret section

42-1-560(b) because Third Party has stipulated it is responsible for Carrier's

lien.

        As part of its settlement agreement, Third Party agreed to be subject

to Carrier's lien. It characterized the agreement in this way: "[W]e have

agreed to stipulate that [Third Party] is responsible for satisfying [Carrier's

lien] as set out in [Third Party's] Agreement with [Claimant]." At the

hearing before the single commissioner, it was affirmed again, without

objection, that Third Party had stipulated it was responsible for satisfaction

of the lien under its settlement agreement with Claimant.

        A stipulation is an agreement, admission or concession made in judicial

proceedings by the parties thereto or their attorneys. See State v. Anderson,

318 S.C. 395, 458 S.E.2d 56 (Ct. App. 1995). Stipulations, of course, are

binding upon those who make them. 73 Am. Jur. 2d Stipulations § 8, at 543

(1974). Here, Third Party made a concession that it was responsible for

satisfaction of Carrier's lien. This stipulation is therefore binding upon it,


        1S.C. Code Ann. § 42-1-560(b) provides:
The injured employee ... shall be entitled to receive
the compensation and other benefits provided by, this
Title and to enforce by appropriate proceedings his .
. . rights against the third party . . . . In such case
the carrier shall have a lien on the proceeds of any
recovery from the third party whether by judgment,
settlement or otherwise, to the extent of the total
amount of compensation, including medical and other
expenses, paid, or to be paid by such carrier, less the
reasonable and necessary expenses, including
attorney fees, incurred in effecting the recovery, and
to the extent the recovery shall be deemed to be for
the benefit of the carrier.... Any balance remaining
after payment of necessary expenses and satisfaction
of the carrier's lien shall be applied as a credit
against future compensation benefits for the same
injury or death and shall be distributed as provided
in subsection (g) of this section....

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KIRKLAND v. ALLCRAFT (CAROLINA v. SCE&G)

and it cannot now assert that it is not responsible for the lien. We affirm

the circuit court on this issue.

B. EQUITABLE REDUCTION

        Third Party next argues that the circuit court erred in failing to order

an equitable reduction of Carrier's lien under S.C. Code Ann. § 42-1-

560(f)(1985).

        Section 42-1-560(f) states, in part:

Notwithstanding other provisions of this item, where an employee
or his representative enters into a settlement with or obtains a
judgment upon trial from a third party in an amount less than
the amount of the employee's estimated total damages, the
commission may reduce the amount of the carrier's lien on the
proceeds of such settlement in the proportion that such
settlement or judgment bears to the commission's evaluation of
the employee's total cognizable damages at law. Any such
reduction shall be based on a determination by the commission
that such reduction would be equitable to all parties concerned
and serve the interests of justice.

        Third Party's expert witness testified that the amount of Claimant's

total damages was $388,717, and that if he were advising a client, he would

probably recommend that a client seriously consider settling for $200,000.

Third Party settled the case with Claimant for approximately $55,000.

Obviously, Claimant has entered into a settlement with a third party in an

amount less than the amount of Claimant's estimated total damages. The

statute explicitly declares that "where an employee . . . enters into a

settlement with ... a third party in an amount less than the amount of the

employee's estimated total damages, the commission may reduce the amount

of the carrier's lien on the proceeds of such settlement . . . ." Thus, we are

bound by the unambiguous terms of the statute to find that the lien may be

reduced in the present instance. See Paschal v. State of S.C. Election

Comm'n, 317 S.C. 434, 454 S.E.2d 890 (1995)(Where the terms of the statute

are clear, the court must apply those terms according to their literal

meaning.).

        The statute does not specify who may petition to have the lien reduced.

Ordinarily, it may be the claimant who would seek a reduction of the lien of

the carrier; however, there is nothing in the statute that precludes a third

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KIRKLAND v. ALLCRAFT (CAROLINA v.SCE&G)

party from also seeking a reduction of the lien. As such, we find that in the

present case, Third Party does have standing to raise this issue.

        However, it does not follow, simply because a party can petition to

reduce the lien, that it is automatically entitled to a reduction. The statute

provides that "[a]ny such reduction shall be based on a determination by the

commission that such reduction would be equitable to all parties concerned

and serve the interests of justice." S.C. Code Ann. § 42-1-560(f). In

considering whether or not to reduce the lien, the commission may consider

factors such as the strength of the claimant's case, the likelihood of third

party liability, claimant's desire to settle, and whether carrier is unreasonably

refusing to consent to a settlement.2

        We remand this matter to the Workers' Compensation Commission to

determine whether Carrier's lien should be reduced. We express no opinion

on whether there should be a reduction. The commission may determine this

matter based on the existing record or may take additional testimony.

CONCLUSION

        Based on the foregoing, the circuit court's order is AFFIRMED IN

PART, REVERSED IN PART, AND REMANDED.

FINNEY, C.J., WALLER and BURNETT, JJ., concur. MOORE, A.J., not

participating.


        2The commission is not limited to these factors.

p. 7