727 S.E.2d 724. On June 19, 2012, the NC Court of Appeals examined at what level of evidence was sufficient for defendants to deny the claim and avoid attorney’s fees. In this case, the Court found that the defendants had sufficient evidence to reasonably deny the claimant’s request for payment for a two bedroom apartment.
The plaintiff was paralyzed while working. The defendants accepted the claim. His home was modified for handicap accessibility until the claimant was able to live on his own. Thereafter, the claimant alleged he needed a two bedroom apartment, with the extra bedroom used to store medical supplies, storing equipment, and other assistance devices. The defendants denied they were liable for rental payments for a two bedroom apartment.
At hearing Deputy Commissioner Houser granted the claimant’s request for housing assistance. He also awarded attorney’s fees for unreasonable denial by the defendants under N.C.G.S. §97-88.1. The defendants appealed to the Full Commission who affirmed the award of ½ of housing assistance, but denied the request for attorney’s fees. The claimant appealed.
The N.C. Court of Appeals determined that the Full Commission did not err. They concluded the defendants were reasonable in their defense of the rental payments. The primary issue was whether there was a reasonable question the plaintiff was entitled to the increased rental payments pursuant to case law and statute. The claimant cited the only two cases showing the employer’s responsibility to provide handicapped-accessible housing to a totally disabled claimant as case law supporting the unreasonableness of the defendants’ denial. The Court disagreed and found that neither decision addressed an issue involving ongoing rent payments. Instead, they dealt with the initial costs of making housing accessible. Thus, the lack of precedent led the Court to conclude the defendants reasonably denied the claim on the basis of a legitimate question of law.
The take-away: In Burnham, the Court found that where there is a legitimate legal issue a defendants’ denial is reasonable. The Court was keen to review case law to determine whether a question of law existed and whether the Courts had addressed a substantially similar fact pattern. The case illustrates that a denial must be based on a justifiable defense or question of law. Where there is a legitimate question how the law should be applied (i.e. Case law or statute does not address the disagreement) a defendants’ denial will survive a challenge of attorney’s fees. On the other hand, where a case addresses the question in dispute and has similar facts then a request for attorney’s fees may be justified.
