Appeals court sanctions insurer over denied comp death claim

A North Carolina appeals court is ordering a workers compensation insurer and furniture company to pay all litigation-related costs following the workplace shooting death of a woman whose family’s survivor benefits claim was denied and later accepted after the widower sued the company for wrongful death.

Phelifia “Michelle” Marlow was shot and killed by a co-worker in 2021 while working for TCS Designs Inc., a commercial furniture manufacturer in Hickory, North Carolina. The employer denied a workers comp claim for survivor benefits alleging the shooting was due to an altercation with a co-worker and unrelated to the woman’s job, according to Marlow v. TCS Designs, filed in the Court of Appeals of North Carolina on July 2.

The widower, Justin Marlow, filed an appeal with the Industrial Commission and, following a year’s worth of proceedings, in early 2022 dropped his request for comp benefits. The company and its insurer filed no objection, according to court records.

Four days later, Mr. Marlow sued for wrongful death. The company responded by approving workers comp survivor benefits and sending checks to Mr. Marlow as compensation for his wife’s death. He never cashed the checks, according to court records.

Months later, the Industrial Commission denied a TCS motion to reopen the claim and accept compensability. The insurer and employer then appealed and moved to dismiss the wrongful death suit, of which a trial court judge denied.

The insurer later argued that by sending checks, it had accepted the claim and that it was not subject to tort litigation as a result. The appeals court disagreed, dubbing the court proceedings as “frivolous,” as the Industrial Commission lacked jurisdiction since the claim had been dismissed, and ordering the insurer and employer to cover the costs thereof, which include fees paid to the court and attorney’s fees.