STATE OF NORTH CAROLINA



STATE OF NORTH CAROLINA IN THE OFFICE OF

ADMINISTRATIVE HEARINGS

COUNTY OF WAKE 03 CPS 0359

| | | |

|DOLORES CHAVIS, |) | |

|Petitioner, |) | |

| |) | |

|v. |) |DECISION |

| |) | |

|NORTH CAROLINA CRIME VICTIMS COMPENSATION COMMISSION, |) | |

|Respondent. |) | |

THIS MATTER came on to be heard before Administrative Law Judge James L. Conner, II on 27 August 2003 in Raleigh, North Carolina. The parties submitted additional information on 2 December 2003 and 15 December 2003. The Respondent submitted proposed findings of fact and conclusions of law on 30 January 2004.

APPEARANCES

For Petitioner: Dolores Chavis, Pro Se

287 Melissa Drive

Pembroke, North Carolina 28372

For Respondent: Donald K. Phillips

Assistant Attorney General

North Carolina Department of Justice

9001 Mail Service Center

Raleigh, North Carolina 27699-9001

ISSUES PRESENTED

1. Did Petitioner fail to establish the requirements for an award pursuant to N.C. Gen. Stat. § 15B-4?

2. Has Petitioner’s alleged losses upon which her claim is based been or will they be recouped from a collateral source pursuant to N.C. Gen. Stat. § 15B-11(d)?

Based upon the testimony at hearing and the whole record, the undersigned makes the following:

FINDINGS OF FACT

1. On 5 July 2002 at approximately 11:00 p.m., Petitioner’s son, Gregory Chavis (victim), was shot and killed outside his house after walking home from Petitioner’s house. The victim and his killer had been involved in an ongoing dispute.

2. On 24 July 2002, Petitioner submitted a Victim Compensation Application to the Respondent, North Carolina Crime Victims Compensation Commission, to assist her in the payment of funeral expenses for her son.

3. Following an investigation into the merits of Petitioner’s claim, on 2 January 2003, the Interim Director of the Respondent agency denied Petitioner’s claim because she felt that Petitioner had a collateral source for payment of the funeral expenses within the meaning of N.C. Gen. Stat. §§ 15B-2(3) and 11(d). The Interim Director sent Petitioner a cover letter and Determination of Director Denied.

4. On or about 28 January 2003, Petitioner sent a letter to the Office of Administrative Hearings (OAH) expressing her desire to appeal. Additionally, Petitioner stated in her letter that “I filed for Chapter 13 Bankruptcy in October of 2003.” This letter was file-stamped by the OAH on 2 February 2003. On 14 February 2003, Maria G. Erwin, Deputy Clerk of OAH, sent Petitioner a letter noting that the OAH had received her 28 January 2003 letter but adding that the letter might not constitute a Contested Case. Ms. Erwin sent Petitioner a Petition for Contested Case Hearing form for Petitioner to complete and return.

5. On 11 March 2003, Petitioner filed a Petition for Contested Case Hearing alleging that the Respondent exceeded its authority and jurisdiction, acted erroneously, failed to use proper procedure, acted arbitrarily or capriciously, failed to act as required by law or rule, and otherwise substantially prejudiced her rights. Again, Petitioner noted on her Petition that she was in Bankruptcy and added that there was a $2,700 balance left on the funeral expense.

6. On or about 21 July 2003, Petitioner faxed the OAH and requested a continuance until after August 2003. In Petitioner’s letter she again repeated that she had filed for bankruptcy but noted that she had done so in December and not October. Again, Petitioner stated that only approximately $2,700 was owed for the funeral expenses.

7. On 29 July 2003, Judge Mann filed an Order of Continuance and Order of Reassignment. The hearing was rescheduled to the week of 25 August 2003 and Administrative Law Judge James L. Conner, II was assigned to preside over the matter.

8. On 1 August 2003, Judge Conner filed a Notice of Hearing for a hearing on the matter on 25 August 2003 in Charlotte. On 5 August 2003, Judge Mann filed an Amended Notice of Hearing changing the location to Raleigh.

9. On 14 August 2003, Judge Conner filed an Order denying Respondent’s 11 April 2003 Motion to Dismiss.

10. The undersigned gave counsel for Respondent an opportunity to support his theory that the bankruptcy proceeding is a “collateral source” by identifying the status of the bankruptcy and the claim made by Locklear and Sons Funeral Home. Additionally, counsel for Respondent was asked to assess the availability and procedure for possible payment from the Respondent to the funeral home through the bankruptcy proceedings. I then stayed the proceedings pending an assessment from Petitioner and Respondent about the bankruptcy case. At the hearing, Petitioner provided Respondent the name and address of her bankruptcy attorney and trustee.

11. On 28 August 2003, counsel for Respondent sent a letter to John T. Orcutt, attorney for Petitioner, and Trawick H. Stubbs, Jr., bankruptcy trustee, inquiring about the status of Petitioner’s case and specifically inquiring: 1) “What is the status of the claim made by Locklear and Sons Funeral Home? How much is currently owed?; 2) If there is a balance owed to Locklear and Sons Funeral Home, have they agreed to partial or percentage payment of some sort? In other words, what is Ms. Chavis’ payment breakdown?; and 3) If the Commission or the Administrative Law Judge determines that Ms. Chavis’ claim is eligible for award, who would the Commission pay with regard to the funeral expenses? What would be the correct procedure for this?”

12. Counsel for Respondent never received a reply from either Mr. Orcutt or Mr. Stubbs.

13. On or about 15 December 2003, Petitioner submitted a status report. The status report did not provide any additional information from that already obtained at the 27 August 2003 hearing.

14. On or about 20 January 2003 and again on 29 January 2003, counsel for Respondent visited nceb. to check the status of the bankruptcy claim, given that neither Petitioner nor her attorney or trustee had provided additional information. Counsel for Respondent was able to learn that Petitioner’s bankruptcy claim (02-09147-ATS [for Judge A. Thomas Small]) (case lookup Wilson) was filed on 1 November 2002 and appears pending as an existing case. Furthermore, counsel for Respondent was able to identify that Trawick H. Stubbs is the trustee of record and that John T. Orcutt is the attorney of record.

Based upon the foregoing Findings of Fact, the undersigned makes the following:

CONCLUSIONS OF LAW

1. Respondent concedes that Petitioner meets the requirements for an award pursuant to N.C. Gen. Stat. § 15B-4. This court also specifically concludes that she meets said requirements.

2. The only question is whether Petitioner has lost her eligibility for an award because of payment of the funeral expenses by a “collateral source.”

3. “Collateral source” is defined as “a source of benefits or advantages for economic loss otherwise compensable that the victim or claimant has received or that is readily available to him from any of the following sources: . . .” N.C. Gen. Stat. § 15B-2(3). Eight specific sources are listed. Discharge in bankruptcy is not among those sources. All of the eight listed sources have the common theme that they are sources of cash payment to the claimant in reimbursement for the same expenses for which reimbursement is being requested from the Commission.

4. The bankruptcy system does not provide any cash payment to a claimant. That system can provide, if all requirements are met, a “discharge” of debts, meaning that the debts are erased. In Chapter Seven bankruptcy cases, this can completely erase many debts: essentially, the debtor turns over all of her assets, minus certain exemptions, to the trustee, who pays such of the debtor’s debts as he can, in priority order. Any remaining debts are discharged. Petitioner, however, is undergoing a Chapter Thirteen proceeding, which requires the debtor to make ongoing payments to the trustee over a period of years. Only after all payments are made are any remaining debts discharged.

5. In summary, Petitioner will be paying some or all of the funeral home debt through the bankruptcy trustee.

6. In any event, neither participation in a bankruptcy proceeding nor discharge of a debt in bankruptcy is included in the definition of “collateral source” in the statute. Therefore, the Director erred in denying Petitioner’s claim on that ground.

7. Even were this not the case, the statute clearly provides that the “existence of a collateral source that would pay expenses directly related to a funeral, cremation, and burial, including transportation of a body, shall not constitute grounds for the denial or reduction of an award of compensation.” N.C. Gen. Stat. § 15B-11(d). The Director also erred in her denial on this ground.

8. The statute limits reimbursement for funeral expenses to $3,500. N.C. Gen. Stat. § 15B-2(1). The funeral expenses for Petitioner’s son appear to be $3,975.73, one thousand dollars of which she has already paid, and $2,975.73 of which is a debt in bankruptcy.

Based upon the foregoing Conclusions of Law, the undersigned makes the following:

DECISION

The North Carolina Crime Victims Compensation Commission shall award Petitioner the total amount of $3,500 for her son’s funeral expenses and shall disburse such award to her forthwith.

NOTICE

The agency making the final decision in this contested case is required to give each party an opportunity to file exceptions to this decision issued by the undersigned, and to present written arguments to those in the agency who will make the final decision. N.C. Gen. Stat. § 150B-36(a). In accordance with N.C. Gen. Stat. § 150B-36 the agency shall adopt each finding of fact contained in the Administrative Law Judge’s decision unless the finding is clearly contrary to the preponderance of the admissible evidence. For each finding of fact not adopted by the agency, the agency shall set forth separately and in detail the reasons for not adopting the findings of fact and the evidence in the record relied upon by the agency in making the finding of fact. The agency shall adopt the decision of the Administrative Law Judge unless the agency demonstrates that the decision of the Administrative Law judge is clearly contrary to the preponderance of admissible evidence in the official record. The agency that will make the final decision in this case is the North Carolina Crime Victims Compensation Commission.

ORDER

It is hereby ordered that the agency making the final decision in this matter serve a copy of the final decision on the Office of Administrative Hearings, 6714 Mail Service Center, Raleigh, North Carolina 27699-6714, in accordance with N.C. Gen. Stat. § 150B-36.

IT IS SO ORDERED.

This the 16th day of March, 2004.

___________________________________

James L. Conner, II

Administrative Law Judge

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