In Murray v. Moody, 797 S.E.2d 365 (N.C. Ct. App. 2017), a Wilson County Superior Court entered an “Amended Final Judgment” expressly provided judgment for a lien on damages that a jury awarded in a civil suit in favor of the Employer and Carrier. While Moody was appealing the Amended Final Judgment, he and his insurer entered into a settlement agreement with Plaintiff, Robert Murray. Moody subsequently filed a motion seeking determination of the workers’ compensation lien.  Following hearing and oral arguments on Moody’s motion, the Trial Court Judge found that he was barred by the doctrine of res judicata, because another Wilson County Superior Court Judge had already entered the Amended Final Judgment addressing the Workers’ Compensation Defendants’ subrogation lien.

The Court of Appeals reversed Wilson County Superior Court Judge’s ruling that the Claimant lacked jurisdiction to determine the amount of an employer’s lien on the damages that a jury awarded to an injured employee.

In reversing the Trial Court Judge’s denial of Moody’s motion, the Court of Appeals held that res judicata was inapplicable to the case, stating, “[T]he [workers’ comp] statute specifically contemplates that a judgment will be issued in an action between the employee and a third party before ‘either party’ may ‘apply’ to determine the subrogation amount …”

The case was remanded for further proceedings before the Trial Court to determine the amount of the Workers’ Compensation Defendants’ subrogation lien amount.  In its Opinion, the Court of Appeals noted, “[T]his case is unique in the context of subsection 97-10.2(j) because Defendants have not simply asserted a lien on Murray’s recovery; instead, the subrogation amount they seek to recover is memorialized in a judgment granted in favor of Murray and the Employer and Carrier”  Accordingly, the Court of Appeals noted in dicta, “If the trial court decides to reduce the lien amount, it may be necessary for Moody to file an appropriate motion to set aside the amended judgment.”

Practice Point: 

The Superior Court has discretion to determine to calculate the subrogation lien amount, even after another judge has issued a final judgment on the matter memorializing the lien amount, in cases where a hearing has not been yet been held before the trial court to determine the subrogation lien amount under 97-10.2(j).