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.
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