               IN THE SUPREME COURT OF NORTH CAROLINA

                                    No. 99PA19
                                Filed 14 August 2020

GWENDOLYN DIANETTE WALKER, Widow of ROBERT LEE WALKER,
Deceased Employee
              v.
K&W CAFETERIAS, Employer, LIBERTY MUTUAL INSURANCE COMPANY,
Carrier

      On discretionary review pursuant to N.C.G.S. § 7A-31 of the unanimous

decision of the Court of Appeals, 264 N.C. App. 119, 824 S.E.2d 894 (2019), affirming

an Opinion and Award entered on 27 February 2018 by the North Carolina Industrial

Commission. On 11 June 2019, the Supreme Court allowed plaintiff’s petition for

discretionary review. Heard in the Supreme Court on 6 January 2020.


      The Sumwalt Law Firm, by Vernon Sumwalt, for plaintiff-appellant.

      Cranfill Sumner & Hartzog, LLP, by Roy G. Pettigrew, for defendant-appellees.


      HUDSON, Justice.

      Pursuant to plaintiff’s petition for discretionary review, we review the decision

of the Court of Appeals, which affirmed the 27 February 2018 Opinion and Award of

the North Carolina Industrial Commission (the Commission). The Commission found

that the uninsured/underinsured motorist (UIM) proceeds that plaintiff received on

behalf of her husband’s estate through the settlement of a South Carolina wrongful

death lawsuit were subject to defendants’ subrogation lien under N.C.G.S. § 97-10.2.

We conclude that, by an endorsement to the UIM policy covering the vehicle that
                             WALKER V. K&W CAFETERIAS

                                    Opinion of the Court



decedent was driving when he was killed, South Carolina insurance law applies, and

it bars subrogation of UIM proceeds. S.C. Code § 38-77-160 (2015). Therefore, the

UIM proceeds that plaintiff recovered from the wrongful death lawsuit may not be

used to satisfy defendants’ workers’ compensation lien under N.C.G.S. § 97-10.2.

Accordingly, we reverse and remand for further proceedings not inconsistent with

this opinion.1

                         Factual and Procedural Background

      On 16 May 2012, Robert Lee Walker (decedent), plaintiff’s husband and an

employee of defendant K&W Cafeterias (K&W), was involved in a motor vehicle

accident with a third-party in Dillon, South Carolina. Decedent died as a result of his

injuries. The vehicle that decedent was driving was owned by K&W, a North Carolina

corporation headquartered in Winston-Salem, North Carolina.

      Prior to the occurrence of the accident in which Mr. Walker died, the vehicle

insurance policy applicable here was modified by an endorsement, pertinent parts of

which are quoted below:

             THIS ENDORSEMENT CHANGES                      THE     POLICY.
             PLEASE READ IT CAREFULLY.

             SOUTH CAROLINA UNDERINSURED MOTORISTS
             COVERAGE



      1  Because of this holding, we need not—and do not—reach the issue of whether the
Commission erred in ordering that any workers’ compensation lien could be satisfied by
distributing UIM proceeds held for wrongful death beneficiaries who never received workers’
compensation benefits.

                                            -2-
                           WALKER V. K&W CAFETERIAS

                                 Opinion of the Court



            For a covered “auto” licensed or principally garaged in, or
            “garage operations” conducted in South Carolina, this
            endorsement modifies insurance provided under the
            following:

            BUSINESS AUTO COVERAGE FORM
            GARAGE COVERAGE FORM
            MOTOR CARRIER COVERAGE FORM
            TRUCKERS COVERAGE FORM

            With respect to coverage provided by this endorsement, the
            provisions of the Coverage Form apply unless modified by
            the endorsement.

            A.     Coverage

            1.     We will pay in accordance with the South Carolina
            Underinsured Motorists Law all sums the “insured” is
            legally entitled to recover as damages from the owner or
            driver of an “underinsured motor vehicle.”

            ....

            E.     Changes In Conditions

            ....

            5.     The following provision is added:

            CONFORMITY TO STATUTE

            This endorsement is intended to be in full conformity with
            the South Carolina Insurance Laws. If any provision of this
            endorsement conflicts with that law, it is changed to
            comply with the law.

      Decedent’s widow, Gwendolyn Dianette Walker, filed a workers’ compensation

claim with the North Carolina Industrial Commission (the Commission) for medical

expenses and death benefits resulting from decedent’s death under N.C.G.S. § 97-38–


                                         -3-
                                WALKER V. K&W CAFETERIAS

                                       Opinion of the Court



40. On 7 January 2013, the Commission entered a Consent Opinion and Award

ordering defendants to pay $333,763 in workers’ compensation benefits to plaintiff.2

       In 2014, plaintiff, as representative of decedent’s estate, filed a new and

separate civil action in South Carolina—a wrongful death case seeking damages from

the driver of the motor vehicle (the third-party) who was at fault in the accident that

resulted in Mr. Walker’s death. In 2016, plaintiff and the third-party reached a

settlement agreement, according to which plaintiff recovered a total of $962,500 on

behalf of decedent’s estate. The recovery included: (1) $50,000 in liability benefits

from the third-party’s insurer; (2) $12,500 in personal UIM proceeds from plaintiff’s

and decedent’s own personal UIM policy; and (3) $900,000 in UIM proceeds from a

commercial UIM policy that K&W purchased with its automobile insurance carrier.

       On 21 March 2016, Liberty Mutual Insurance Co.—the workers’ compensation

insurance carrier for K&W and co-defendant in this case—filed a request for a

hearing with the North Carolina Industrial Commission in which it sought

repayment of the workers’ compensation death benefits it had paid to plaintiff

beginning in 2013, claiming a lien under N.C.G.S. § 97-10.2 on the UIM proceeds that

she recovered from the South Carolina wrongful death settlement in 2016.




       2  Because all of the decedent’s children were adults at the time of his death, under the
statute, only the widow was entitled to the death benefit. N.C.G.S. § 97-39; N.C.G.S. § 97-
2(12) (“ ‘Child,’ ‘grandchild,’ ‘brother,’ and ‘sister’ include only persons who at the time of the
death of the deceased employee are under 18 years of age.”).

                                               -4-
                            WALKER V. K&W CAFETERIAS

                                   Opinion of the Court



      On 30 March 2016, plaintiff filed a declaratory judgment action against

defendants in South Carolina, asserting that S.C. Code § 38-77-160 precluded

subrogation and assignment to defendants of the UIM proceeds that plaintiff had

been awarded in the settlement. On 2 May 2016, defendants removed the action to

the United States District Court for the District of South Carolina on the basis of

diversity jurisdiction. The United States District Court ultimately abstained from

hearing the declaratory judgment action.

      Meanwhile, on 13 June 2016, plaintiff filed a motion in the North Carolina

Industrial Commission to stay all proceedings on defendants’ subrogation claim

there, pending the result of the federal litigation. Plaintiff’s motion was denied on 28

June 2016. Plaintiff then filed a motion to reconsider, which the Commission denied

on 18 July 2016. Plaintiff appealed and filed another motion for stay. Plaintiff’s

appeal was heard by a Deputy Commissioner.

      In its 10 July 2017 Opinion and Award, the Deputy Commissioner denied

plaintiff’s motion to stay the proceedings and ordered the distribution of plaintiff’s

entire recovery from the South Carolina wrongful death settlement with the at-fault

driver (the third-party recovery). The Deputy Commissioner concluded that

defendants were entitled to subrogation under N.C.G.S. § 97-10.2(f)(1)(c), (h), and

ordered that defendants be reimbursed out of the third-party recovery for the

$333,763 in workers’ compensation benefits that they had paid to Mrs. Walker under

the 7 January 2013 Consent Opinion and Award.


                                           -5-
                             WALKER V. K&W CAFETERIAS

                                    Opinion of the Court



      Plaintiff appealed the 10 July 2017 Opinion and Award to the Full

Commission, which affirmed the Deputy Commissioner’s decision. Plaintiff then

appealed to the Court of Appeals.

      The Court of Appeals affirmed, holding in pertinent part that “[t]he Full

Commission correctly concluded Defendants could assert a subrogation lien for

workers' compensation benefits paid to Plaintiff on the UIM policy proceeds obtained

by Plaintiff in the South Carolina wrongful death action.” Walker v. K&W Cafeterias,

264 N.C. App. 119, 133, 824 S.E.2d 894, 904 (N.C. Ct. App. 2019). As explained below,

we conclude that defendants may not satisfy their workers’ compensation lien by

collecting from plaintiff’s recovery of UIM proceeds in her South Carolina wrongful

death settlement. Accordingly, we reverse the decision of the Court of Appeals.

                                        Analysis

      First, we emphasize that this case is not plaintiff’s workers’ compensation

claim. That claim was fully resolved in 2013 when death benefits were paid to

plaintiff under the Workers’ Compensation Act due to Mr. Walker’s work-related

death. Instead, here we review what should happen to over $900,000 that was paid

to plaintiff in the South Carolina wrongful death settlement with the at-fault driver.

That settlement was reached in 2016, and to date, the money remains in the trust

account of plaintiff’s attorneys.

      Because the 2012 workers’ compensation case was brought in North Carolina,

Liberty Mutual sought to have the Commission order plaintiff to reimburse the


                                            -6-
                              WALKER V. K&W CAFETERIAS

                                    Opinion of the Court



workers’ compensation benefits she had been paid with the as-yet-undistributed

recovery she received in her South Carolina wrongful death settlement. Although the

Commission and the Court of Appeals concluded that Liberty Mutual could be

reimbursed with plaintiff’s wrongful death UIM proceeds, we disagree.

       For the reasons below, we conclude that the South Carolina UIM policy—a

contract to which defendants are party and according to which the wrongful death

settlement proceeds were paid—controls the outcome here. That policy requires the

application of South Carolina law to the payment of UIM proceeds. Under South

Carolina UIM law, an insurer is barred, without exception, from seeking to be

reimbursed with UIM proceeds for benefits it has previously paid. S.C. Code § 38-77-

160 (“Benefits paid pursuant to this section are not subject to subrogation and

assignment.”). Accordingly, we reverse the decision of the Court of Appeals and

remand to the Commission for proceedings not inconsistent with this opinion.

       This case presents a single issue of law, i.e., a conclusion of law by the

Commission, which we review de novo. N.C.G.S. § 97-86 (“The award of the Industrial

Commission . . . shall be conclusive and binding as to all questions of fact; but either

party to the dispute may, within 30 days . . . appeal from the decision of the

Commission . . . for errors of law . . . . The procedure for the appeal shall be as provided

by the rules of appellate procedure.”).

       We must determine whether to apply North Carolina or South Carolina law to

the attempted subrogation of plaintiff’s wrongful death settlement UIM proceeds. The


                                            -7-
                             WALKER V. K&W CAFETERIAS

                                   Opinion of the Court



Court of Appeals analyzed this question as an abstract choice of law issue and

concluded that North Carolina law applies. See Walker, 264 N.C. App. at 131, 824

S.E.2d at 902–03 (discussing Anglin v. Dunbar Armored, Inc., 226 N.C. App. 203, 742

S.E.2d 205 (2013)). We do not agree with the conclusion that this case presents a

choice of law issue; instead we conclude that this issue is properly analyzed under

contract law interpreting a choice-of-law clause. As we are basing our decision on

contractual terms rather than legal principles related to choice of law, we need not—

and do not—go beyond the contract as modified by its endorsement; by the explicit

terms of that contract, the UIM proceeds are paid and governed by South Carolina

law.

       The dissent maintains that plaintiff’s stipulation in 2012 to the jurisdiction of

the Commission over her workers’ compensation claim carries significance here. As

noted above, this case is not the workers’ compensation claim, but involves the

settlement proceeds paid under a UIM policy to settle a civil action filed in South

Carolina against the at-fault driver. Here, in the proceedings before the Commission,

the parties’ stipulations included the following:

             1.    . . . However, Plaintiff disputes if the Industrial
             Commission has personal or in rem jurisdiction to exercise
             authority over underinsured motorist (“UIM”) proceeds
             paid under a South Carolina UIM policy . . . and whether
             those proceeds can be attached to satisfy Defendant’s
             subrogation interest under N.C.[G.S.] § 97-10.2.

             2.     All parties are subject to and bound by the
             provisions of the North Carolina Workers’ Compensation

                                           -8-
                              WALKER V. K&W CAFETERIAS

                                     Opinion of the Court



              Act, N.C.[G.S.] § 97-1 et seq. (“the Act”), except to the extent
              that Plaintiff contends the Industrial Commission’s
              jurisdiction might be limited because of the circumstances
              expressed in paragraph 1.

Unlike the stipulations entered in the workers’ compensation claim, the ones above,

which are included in the Full Commission’s 2017 Opinion and Award, specifically

reserve the arguments plaintiff raises here.

       Defendants argue that the commercial UIM policy purchased by K&W is not a

South Carolina UIM policy. Specifically, they point out that the parties stipulated

before the Commission that the commercial UIM policy was purchased and entered

into in North Carolina. Defendants argue that this fact is dispositive because, under

N.C.G.S. § 58-3-1, an insurance policy is “deemed to be made” in North Carolina if it

is the state where “applications for [the policy] are taken.” N.C.G.S. § 58-3-1 (2019).

       More significantly, defendants’ argument overlooks the effect of the

endorsement that was added to the commercial UIM policy on 7 July 2011, titled

“South Carolina Underinsured Motorist Coverage.” Specifically, the endorsement

states that it “changes the policy.”3 The endorsement also states that it “is intended

to be in full conformity with the South Carolina Insurance Laws” and that “[i]f any

provision of this endorsement conflicts with that law, it is changed to comply with the



       3  Even under North Carolina insurance law, an endorsement like this one that
“changes the contract” becomes part of that contract and is treated as such. See e.g.,
Scottsdale Ins. Co v. Travelers Indem. Co., 152 N.C. App. 231, 234, 566 S.E.2d 748, (2002)
(treating the endorsement as part of the contract for the purposes of construing ambiguity in
favor of the insured).

                                             -9-
                             WALKER V. K&W CAFETERIAS

                                    Opinion of the Court



law.” Further, the endorsement states that “[the insurance carrier] will pay in

accordance with the South Carolina Underinsured Motorists Law.” The clear intent

and effect of this endorsement was to provide for the application of South Carolina

law to all UIM payments under the policy.

      Furthermore, the vehicle operated by decedent at the time of the accident fell

within the categories of vehicles for which the policy endorsement intended to apply

South Carolina law. The endorsement modified the insurance policy for “a covered

‘auto’ licensed or principally garaged in” South Carolina. As found by the Commission

in the 10 July 2017 Opinion and Award, the vehicle decedent was driving at the time

of the accident was registered, garaged, and driven in South Carolina. These factors,

and the fact that the policy endorsement explicitly provided as a matter of contract

that South Carolina UIM law would apply to payments made under the commercial

UIM policy, demonstrate that South Carolina law should apply here. Accordingly, we

hold that the endorsement requires South Carolina UIM law to apply here.4

      The applicable South Carolina statutes include the following:

             All contracts of insurance on property, lives, or interests in
             this State are considered to be made in the State . . . and
             are subject to the laws of this State.


      4  The dissent suggests that the intent of the North Carolina General Assembly in its
Workers’ Compensation Act controls the distribution of the UIM proceeds in the South
Carolina civil case. However, K&W purchased the UIM policy and specifically agreed therein
that any such payments be covered by South Carolina law. Because we conclude that the
UIM payments here are governed by South Carolina law under the terms of the policy
contract, we conclude that the intent of the North Carolina General Assembly does not
control.

                                           -10-
                             WALKER V. K&W CAFETERIAS

                                  Opinion of the Court



      S.C. Code § 38-61-10 (2015).

             Additional uninsured motorist coverage; underinsured
             motorist coverage. Automobile insurance carriers shall
             offer, at the option of the insured, uninsured motorist
             coverage [and] underinsured motorist coverage, up to the
             limits of the insured liability coverage. . . . Benefits paid
             pursuant to this section are not subject to subrogation and
             assignment.

      S. C. Code § 38-77-160.

      By its plain language, S.C. Code § 38-77-160 prohibits subrogation of UIM

payments like those paid to plaintiff in her wrongful death settlement. Accordingly,

having concluded that South Carolina law applies to proceeds paid under Liberty

Mutual’s UIM insurance policy, defendants’ subrogation lien under N.C.G.S. § 97-

10.2 cannot be satisfied by the UIM proceeds that plaintiff received as part of the

wrongful death settlement.

      The dissent here proposes, without explanation or authority, that applying

South Carolina law as required by the contract would allow for “double recovery.”

There can be no double recovery in these circumstances, where Mrs. Walker was

awarded workers’ compensation death benefits, a limited statutory remedy designed

to pay some part of lost wages, medical and funeral expenses only. The UIM proceeds,

limited by statute to one million dollars, are also provided by law as a limited remedy

to give at least some recovery to the victims of an underinsured at-fault driver.

Neither remedy (nor the two combined) purports to fully compensate Mrs. Walker or

her six grown children for their losses due to Mr. Walker’s death, let alone to exceed


                                         -11-
                            WALKER V. K&W CAFETERIAS

                                  Opinion of the Court



any actual damages they have suffered. Moreover, if defendants here were permitted

to recover more than $300,000 out of the UIM proceeds, the grown children (who were

not eligible to receive the workers’ compensation benefits) would be deprived in

significant part of even that limited remedy. We see no indication of a double recovery

here.

                                         Conclusion

        Because we conclude that South Carolina law applies and prohibits the

subrogation of the UIM proceeds paid on account of decedent’s death, we reverse and

remand to the Commission for proceedings not inconsistent with this opinion.



        REVERSED AND REMANDED.




                                         -12-
      Justice NEWBY dissenting.

      This case asks whether a plaintiff who seeks benefits under the North Carolina

Workers’ Compensation Act (the Act) subjects herself to North Carolina’s

accompanying remedial laws, including those concerning subrogation. Under the

General Assembly’s carefully crafted statutory scheme, when a plaintiff chooses to

file for benefits under the Act, the plaintiff also accepts the accompanying provisions

regarding subrogation. Plaintiff had the option to proceed under either North

Carolina or South Carolina’s workers’ compensation acts; plaintiff chose the more

generous North Carolina Act. In her initial proceeding to obtain benefits under North

Carolina’s Act, plaintiff stipulated that she was “subject to and bound by the

provisions of the North Carolina Workers’ Compensation Act” and that “[t]he North

Carolina Industrial Commission has jurisdiction over the parties and the subject

matter involved in this case.” Having availed herself of the benefits under the Act,

she is also bound by the terms of North Carolina’s remedial laws, including those

allowing an employer to subrogate recoveries from third-parties which prevent double

recoveries. Because plaintiff received a separate third-party recovery after

defendants had provided benefits under the Act, defendants are entitled to proceed

under the Act to seek subrogation of those proceeds. As such, the Court of Appeals

properly affirmed the Industrial Commission’s holding that plaintiff’s wrongful death

proceeds were subject to subrogation.
                               WALKER V. K&W CAFETERIAS

                                     Newby, J., dissenting



       To reach its outcome, the majority, however, mischaracterizes the issue here

and relies solely on what it terms as contract law and South Carolina insurance law.

The majority ignores that plaintiff chose to file for workers’ compensation in North

Carolina and, as such, subjected herself to all aspects of the Act. The majority allows

a plaintiff to choose the best parts of the Act, permitting plaintiff to obtain the full

benefits of the Act without being subject to the accompanying subrogation provisions

designed to prevent double recovery. By doing so, the majority essentially rewrites

the North Carolina Workers’ Compensation Act by deleting the comprehensive

nature of its provisions. The majority ultimately concludes that so long as there is a

rider to the insurance policy applying a state’s law that prohibits subrogation, a

plaintiff who has an accident outside of North Carolina but files for benefits in North

Carolina may be eligible for double recovery.1 Because plaintiff chose to proceed

under North Carolina Workers’ Compensation Act, she is bound by the subrogation

provision of N.C.G.S. § 97-10.2(f) (2019). As the Court of Appeals held, the proceeds

from the separate third-party recovery she obtained are subject to subrogation by the

employer. Accordingly, I respectfully dissent.




       1 Moreover, the full ramifications of the majority decision are unclear given that there
are numerous companies located in North Carolina that do business in other states and have
similar riders on their insurance policies conforming the policies to the laws of the other
states. The majority’s holding will certainly have a significant impact on the insurance
premiums that North Carolina companies pay.

                                              -2-
                              WALKER V. K&W CAFETERIAS

                                    Newby, J., dissenting



       Decedent, a South Carolina resident, was killed in a vehicular accident in

South Carolina, driving a truck owned by his employer, K&W Cafeterias, Inc., a

North Carolina corporation. A third party caused the accident. K&W had insured the

truck under a blanket vehicular insurance policy purchased and entered into within

North Carolina. Because K&W conducted business in South Carolina, the policy

contained a required endorsement providing the coverage to be in conformity with

“South Carolina Insurance Laws.”2

       The deceased employee’s widow (plaintiff), a South Carolina resident, could

have pursued workers’ compensation benefits under North Carolina or South

Carolina law, because the deceased was employed by a North Carolina corporation.

On 21 August 2012, plaintiff decided to file for death benefits under North Carolina’s

Workers’ Compensation Act. As a part of plaintiff’s initial action seeking death

benefits under the Act, the parties stipulated the following:

              1.     The date of the admittedly compensable injury that
              is the subject of this claim is May 16, 2012. On that date,
              Employee-Plaintiff died as the result of a motor vehicle
              accident arising out of and in the course of his employment
              with Defendant-Employer.

              2.    At all relevant times, the parties hereto were subject
              to and bound by the provisions of the North Carolina
              Workers’ Compensation Act.



       2  K&W, doing business in multiple states, had multiple endorsements in its UIM
policy, including endorsements or financial responsibility identification cards for Florida,
West Virginia, and Virginia.


                                            -3-
                             WALKER V. K&W CAFETERIAS

                                   Newby, J., dissenting



             ....

             6.     The North Carolina Industrial Commission has
             jurisdiction over the parties and the subject matter
             involved in this case.

Based on the stipulations and other evidence, the Industrial Commission entered an

order requiring defendants to pay plaintiff a total of $333,763 in benefits.

      On 26 August 2014, after accepting benefits under the North Carolina

Workers’ Compensation Act, plaintiff, the appointed representative of decedent’s

estate, filed a wrongful death and survival action in South Carolina against the at-

fault driver and his father. In March 2016, about a year and a half after plaintiff filed

the action, the parties settled the lawsuit, from which plaintiff received $962,500 (the

third-party settlement). The settlement consisted of (1) $50,000 in liability benefits

from the at-fault driver’s insurer under a South Carolina insurance policy; (2) $12,500

from the underinsured motorist (UIM) coverage of plaintiff and decedent’s own

personal vehicle from their automobile insurance carrier; and (3) $900,000 in

commercial UIM coverage from employer K&W’s automobile insurance carrier

pursuant to their commercial UIM coverage for the vehicle decedent was driving

when the accident occurred. Throughout the proceeding, plaintiff has conceded that

the $50,000 in benefits provided from the at-fault driver’s insurer through a South

Carolina insurance policy is subject to subrogation under both North Carolina law

and South Carolina law.




                                           -4-
                              WALKER V. K&W CAFETERIAS

                                    Newby, J., dissenting



       On 21 March 2016, defendants filed the appropriate form with the North

Carolina Industrial Commission for a subrogation lien of $333,763 against the

$962,500 that plaintiff had received from the third-party settlement. Defendants

proceeded under the relevant portion of the Act that allows a defendant to be

subrogated against any recovery. Plaintiff had initially stipulated that she was

subject to the North Carolina Industrial Commission’s jurisdiction when she filed to

receive benefits. However, after receiving full benefits, when defendants filed for

subrogation, plaintiff for the first time disputed whether the Industrial Commission

had jurisdiction over the UIM policy proceeds, and whether those proceeds were

subject to subrogation under N.C.G.S. § 97-10.2.3 On 10 July 2017, the deputy

commissioner ruled in defendants’ favor, finding that plaintiff must satisfy

defendants’ $333,763 subrogation lien from the $962,500 third-party settlement.

       Plaintiff then appealed to the full Industrial Commission, which ultimately

held that defendants were entitled to a subrogation lien of the entire third-party

settlement proceeds, “not just [plaintiff’s] share of the Third-Party Recovery.” The

Commission reasoned that “[p]laintiff voluntarily triggered the Commission’s

jurisdiction by filing a claim for benefits under the Act and obtaining a final award of

benefits via the Consent Opinion and Award, in which [p]laintiff explicitly




       3 The majority does not discuss the stipulations entered into initially by the parties
and seems to confuse those stipulations with the stipulations made later when plaintiff was
contesting defendants’ subrogation rights.

                                             -5-
                            WALKER V. K&W CAFETERIAS

                                  Newby, J., dissenting



acknowledged the applicability of the Act and the jurisdiction of the Commission.”

Moreover, because plaintiff was seeking relief in North Carolina, where she willingly

chose to file for benefits under the Act, and because N.C.G.S. § 97-10.2 is remedial in

nature, the Commission concluded as a matter of law that the statute allowed

defendants to seek subrogation of the relevant portion of the wrongful death proceeds.

Essentially, plaintiff’s choice to subject herself to the benefits of the Act also

warranted the application of the relevant procedural subrogation provision as

provided by the North Carolina legislature.

      The Court of Appeals upheld the full Commission’s decision, holding that

defendants were entitled to a lien against the third-party settlement proceeds. Walker

v. K&W Cafeterias, 824 S.E.2d 894, 904 (N.C. Ct. App. 2019). The Court of Appeals

reasoned, inter alia, that regardless of whether the UIM policy was a South Carolina

policy, plaintiff had chosen North Carolina as the forum state in which to file for

benefits, and thus North Carolina law would apply as the law of the forum state. Id.

at 903–04. This rationale is consistent with Anglin v. Dunbar, which reaffirmed that

remedial rights are determined by the law of the forum state. Id. (citing Anglin v.

Dunbar Armored, Inc., 226 N.C. App. 203, 204–05, 209–10, 824 S.E.2d 894, 206–07,

209 (2013)). As such, the Court of Appeals in this case concluded that defendants were

entitled to seek subrogation of the wrongful death proceeds. Id. at 904.

      The question presented here is whether the General Assembly intended for

someone who receives benefits under the Act to be bound by its remedial provisions.

                                          -6-
                             WALKER V. K&W CAFETERIAS

                                   Newby, J., dissenting



“The principal goal of statutory construction is to accomplish the legislative intent.”

Lenox, Inc. v. Tolson, 353 N.C. 659, 664, 548 S.E.2d 513, 517 (2001) (citing Polaroid

Corp. v. Offerman, 349 N.C. 290, 297, 507 S.E.2d 284, 290 (1998)). “The best indicia

of that intent are the language of the statute[,] . . . the spirit of the act[,] and what

the act seeks to accomplish.” Coastal Ready-Mix Concrete Co. v. Bd. of Comm’rs, 299

N.C. 620, 629, 265 S.E.2d 379, 385 (1980) (citation omitted).

      The North Carolina legislature has chosen to provide generous compensation

for injured workers and their heirs through the North Carolina Workers’

Compensation Act. “[T]he purpose of the North Carolina Workers’ Compensation Act

is not only to provide a swift and certain remedy to an injured worker, but is also to

ensure a limited and determinate liability for employers.” Estate of Bullock v. C.C.

Mangum Co., 188 N.C. App. 518, 522, 655 S.E.2d 869, 872 (2008) (citing Barnhardt

v. Cab Co., 266 N.C. 419, 427, 146 S.E.2d 479, 484 (1966)).

      Notably, the Act is comprehensive. Given the fact that the Act provides

extensive and generous benefits to individuals, the legislature has balanced an

employer’s duty to provide compensation with its right to subrogate those benefits

where an individual or estate receives a second, separate recovery for the same injury.

“The legislative intent behind the Workers’ Compensation Act is not to provide an

employee with a windfall of a recovery from both the employer and the third-party

tortfeasor.” Id. (citing Radzisz v. Harley Davidson of Metrolina, 346 N.C. 84, 89, 484

S.E.2d 556, 569 (1997)). Thus, section 97-10.2 provides that an employer may obtain

                                           -7-
                            WALKER V. K&W CAFETERIAS

                                  Newby, J., dissenting



a subrogation lien, to the extent of the amount of benefits paid, against certain third-

party recovery amounts. The statute sets forth that:

                   (f)(1) . . . if an award final in nature in favor of the
             employee has been entered by the Industrial Commission,
             then any amount obtained by any person by settlement with,
             judgment against, or otherwise from the third party by
             reason of such injury or death shall be disbursed by order
             of the Industrial Commission for the following purposes
             and in the following order of priority:

                    ....

                   c. Third to the reimbursement of the employer for all
             benefits by way of compensation or medical compensation
             expense paid or to be paid by the employer under award of
             the Industrial Commission.

                    ....

                    (h) In any . . . settlement with the third party, every
             party to the claim for compensation shall have a lien to the
             extent of his interest under (f) hereof upon any payment
             made by the third party by reason of such injury or
             death . . . and such lien may be enforced against any person
             receiving such funds.

N.C.G.S. § 97-10.2 (emphases added).

      Whether this statute applies here also depends on if section 97-10.2 is

substantive or remedial. Lex loci, or the “law of the jurisdiction in which the

transaction occurred or circumstances arose on which the litigation is based,” governs

substantive laws. Cook v. Lowe’s Home Centers, Inc., 209 N.C. App. 364, 366, 704

S.E.2d 567, 569 (2011) (citing Charnock v. Taylor, 223 N.C. 360, 361, 26 S.E.2d 911,



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                                  Newby, J., dissenting



913 (1943)). Alternatively, lex fori, or “the law of the forum in which the remedy is

sought,” governs when the statute at issue is remedial. Id.

      “Where a lien is intended to protect the interests of those who supply the

benefit of assurance that any work-related injury will be compensated, it is remedial

in nature.” Id. at 367, 704 S.E.2d at 570. Because N.C.G.S. § 97-10.2(f), like N.C.G.S.

§ 97-10.2(j), “is remedial in nature and remedial rights are determined by the law of

the forum,” Anglin, 226 N.C. App. at 209, 742 S.E.2d at 209 (cleaned up) (citation

omitted), North Carolina law applies.

      Here plaintiff chose to pursue workers’ compensation benefits in North

Carolina instead of pursuing benefits in her home state, which was also the location

of the accident. As a part of her initial filing with the Industrial Commission seeking

benefits under the Act, plaintiff explicitly stipulated that she was “subject to and

bound by the provisions of the North Carolina Workers’ Compensation Act” and that

“the North Carolina Industrial Commission had jurisdiction over the parties and the

subject matter involved in this case.” Thus, plaintiff subjected herself to North

Carolina jurisdiction by initially filing for benefits in North Carolina. In order to

receive employer provided benefits under the Act, plaintiff necessarily consented to

the application of North Carolina’s remedial laws, as North Carolina is the forum

state in this dispute.




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                                  Newby, J., dissenting



      Because N.C.G.S § 97-10.2(f) is remedial in nature, and because plaintiff

consented to the application of North Carolina’s remedial laws when she initially filed

to receive benefits under the Act, plaintiff is bound by N.C.G.S § 97-10.2. Plaintiff

chose to file for benefits in North Carolina, under the Act which provides generous

benefits, but those benefits are also balanced by the corresponding subrogation

provisions. On the other hand, South Carolina does not allow subrogation of UIM

proceeds, but that balances the more limited benefits that it provides through its own

workers’ compensation act. Had plaintiff wanted the benefit of South Carolina’s policy

which prevents subrogation, she should have, and could have, filed for workers’

compensation benefits in South Carolina. Simply put, the General Assembly did not

intend for a plaintiff to choose to subject herself to North Carolina’s jurisdiction to

receive benefits, but reject North Carolina’s jurisdiction when it comes to the

remedial aspects of North Carolina’s Workers’ Compensation scheme, including an

employer’s ability to subrogate any proceeds that a plaintiff or estate receives from a

third-party.

      The majority concludes that plaintiff did not stipulate to the application of

North Carolina law to the UIM proceeds since she did not stipulate to this fact in the

full Industrial Commission proceeding. In doing so, the majority ignores that plaintiff

chose the forum state by filing for benefits under the Act, and by stipulating to the

application of North Carolina’s jurisdiction at that point, which results in the

application of North Carolina remedial laws. The majority instead treats this case in

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                                   Newby, J., dissenting



a vacuum as one solely involving an insurance contract interpreting a choice-of-law

clause. The majority also fails to acknowledge the comprehensive nature of the North

Carolina Workers’ Compensation Act, allowing a plaintiff to choose only the best

portions of the Act.

      Moreover, though the application is not entirely clear, it seems the majority’s

analysis will result on one hand in a North Carolina resident who has an accident in

South Carolina achieving a double recovery by receiving workers’ compensation

benefits without subrogation. On the other hand, a North Carolina resident who has

an accident in North Carolina would not achieve a double recovery as he would be

subject to the subrogation statutes, even when both parties choose to file for benefits

in North Carolina. Surely the North Carolina legislature did not intend to provide

this windfall recovery to some individuals while limiting the recovery for others. The

intent of the North Carolina legislature is relevant where a plaintiff subjects herself

to benefits under the Act by filing in North Carolina, despite the majority’s contention

to the contrary.4

      Plaintiff’s policy and the rider here cannot be viewed in a vacuum as presenting

only a question of contract law as the majority contends. By filing for benefits under

the Act, plaintiff is bound by North Carolina’s clearly established statutory provisions


      4   The majority contends that since the recovering parties under workers’
compensation and the UIM policy may be different, some may be deprived of recovery through
subrogation under North Carolina law. This is a policy determination appropriately made by
the legislature.

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                            WALKER V. K&W CAFETERIAS

                                  Newby, J., dissenting



allowing subrogation of any third-party proceeds. N.C.G.S. § 97-10.2(f)(1), (h). The

decision of the Court of Appeals upholding the decision of the Industrial Commission

should be affirmed. I respectfully dissent.




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