Orange County ex rel. Byrd v. Byrd
129 N. C. App. 818 (1998)
North Carolina Court of Appeals
This case arose out of the unpaid child support debts of Mr. Charles Allen Byrd. Mr. Byrd had two minor children from two different women, and had also entered into two separate voluntary support agreements with each mother. An at-work accident placed Mr. Byrd on workers’ compensation benefits, and he received temporary total disability benefits for two separate periods of time. The issue in the Court of Appeals was one of first impression, and involved the authority of the trial court to apportion a settlement among child support liens.
The trial court ruled in Mr. Byrd’s favor, striking his child support arrearages during the period that he was incarcerated and unable to make bail, and also apportioned the proceeds of his workers’ compensation settlement.
Charles Byrd (Byrd) had a daughter, Jessica, with JoAnn Laws Byrd, and entered a voluntary support agreement (VSA) whereby Byrd agreed to pay support for Jessica while she was a minor. Byrd had a similar VSA with Kimberly Jan Moore, agreeing to pay support for his minor son Jeremy, and also to repay past public assistance of $8,500.00.
While Byrd was receiving workers’ compensation benefits, he was arrested and jailed on criminal charges. Unable to pay his bail, Byrd sat in jail for three months, and ultimately retained counsel for his criminal charges by promising to pay the attorney’s fees upon settlement of his workers’ compensation claim. His claim ultimately settled for $18,000.00.
Upon Byrd’s motion to reduce his child support obligation because of his decrease in income as a result of the injury, the trial court granted the motion and reduced his obligation for the time he was incarcerated. Byrd filed another motion, this time seeking to have the court apportion his workers’ compensation settlement. The trial court granted the motion and apportioned Byrd’s settlement as follows: $4,500.00 for attorney’s fees in the workers’ compensation case, $4,910.00 in criminal attorney’s fees, $5,000.00 to Orange County Clerk of Court for child support arrears, and $2,590.00 to Byrd personally.
The North Carolina Court of Appeals, in reviewing the trial court’s orders, had to determine if the trial court erred in entering those two orders.
N.C. Gen. Stat. § 50-13.10(d)(4) contains the provision that provides the court with the ability to reduce child support arrears of a person who is incarcerated and also has child support obligations.
The Court of Appeals held that the trial court’s decision to strike the amounts owed by Byrd while he was incarcerated was not based on any information in the record. At no point did Byrd’s argument outline the dates he was incarcerated, why he was ineligible for work release, or even ask for those amounts to be stricken because of his incarceration. Thus, because there was no competent evidence to support the trial court’s decision, the Court of Appeals reversed that decision.
The provision which allows the trial court to apportion workers’ compensation settlement is N. C. Gen. Stat. § 44-49.1 states that if the Department of Human Services provides written notification that someone receiving a settlement owes past-due child support, a lien is attached to the settlement. However, this only applies “those instances in which there is a nonrecurring payment of a lump-sum amount equal to or in excess of three thousand dollars ($3,000) or periodic payments with an aggregate amount that equals or exceeds three thousand dollars ($3,000).”
Although this section was later rewritten in N.C.G.S. § 44-50, which provided that the child support lien could “in no case, exclusive of attorneys’ fees, exceed fifty percent (50%) of the amount of moneys recovered,” a later revision in N.C.G.S. § 58-3-185 repealed the limitation contained in § 44-50. N.C.G.S. § 58-3-185 also provided that child support liens are subordinate to liens upon insurance for personal injuries and also subordinate to valid health care provider claims. Applying these statutes to the case at hand, there was determined to be no percentage limitation on the amount of the recovery subject to the child support lien, and the child support lien was third in line to be paid out.
The Court of Appeals ultimately reversed both decisions of the trial court, stating that the child support debts incurred while Boyd was incarcerated could not be stricken and the workers’ compensation settlement could not be apportioned by the trial court. While recognizing the strong public policy favoring the collection of child support arrears, the Court used the plain meaning of the statute to determine the outcome of this case. The Appellate Court noted that though the trial court did use conscientious efforts to apportion the recovery equitably, those equity powers do not extend into areas which have been expressly addressed by the legislature.
The Court upheld the child support lien that the Orange County Child Support Enforcement Office had attached to the $18,000.00 settlement that Byrd received, and stated that the settlement was only subject to the attorney’s fees approved by the Industrial Commission for counsel related to the workers’ compensation case.
This case illustrates how important it is to know and understand the law. Although it appeared that the trial court equitably apportioned the settlement, this action was outside of the authority of the court due to explicitly enacted statutes. The State agency in Orange County recognized that there were issues in the trial court’s order that conflicted with the laws as codified in the North Carolina General Statutes. Thus, the agency was correct in appealing the decision to the Court of Appeals.