CHARLOTTE, N.C. — In a rare step, North Carolina officials have agreed to pay $425,000 to a man who was mistakenly declared dead, zipped into a body bag and sent to a morgue.

The payment settles a lawsuit that alleges the mix-up by a medical examiner left Larry Green paralyzed and with severe brain damage.

A spokesman for the N.C. Department of Health and Human Services, which oversees the state medical examiner’s office, did not answer questions but released a statement saying the negotiated settlement “avoids the emotional toll and expense of a lengthy trial.”

According to DHHS, it is one of the first times in the medical examiner system’s nearly 50-year history anyone has collected damages because of the state’s flawed investigations into suspicious deaths.

Green’s attorney, Judith Vincent-Pope, declined repeated requests for comment.

Dr. J.B. Perdue, 77, the medical examiner in the Green case, said he has been wrongly blamed by “ambulance-chasing lawyers.” Asked if he feels guilty about what happened, he said, “Hell no.”

Medical examiners – usually doctors and nurses who investigate cases during their off hours – are supposed to determine the cause of suspicious and violent deaths, such as shootings, suicides, auto wrecks and drownings. Their work is used to help solve crimes, spot public health trends and settle life insurance payouts.

On Jan. 24, 2005, a car hit Green in Franklin County, near Raleigh. Emergency workers found him bleeding and lying face down with a head wound. One paramedic checked Green and found no vital signs.

When Perdue arrived, he opened Green’s jacket and shirt to inspect the body. Eight witnesses, according to court documents, said they saw Green’s chest and abdomen move.

One paramedic suggested that Green might be breathing. But Perdue answered, according to records, “That’s only air escaping the body.”

Perdue ordered authorities to put Green in a body bag and transport him to a morgue. There, Green’s right eyelid twitched multiple times and witnesses again asked whether Green was alive. It was a muscle spasm, Perdue responded, according to the suit, “like a frog leg jumping in a frying pan.”

Later that night, Perdue removed Green’s body from a morgue refrigerator drawer and inspected it again because an N.C. Highway Patrol trooper needed more information. That’s when he realized Green was still alive.

Green’s family has spent years in court trying to recover money for his medical bills. They reached a $1 million settlement with Franklin County, local EMS and two paramedics in 2009.

Green’s father filed a complaint against DHHS in 2008. An affidavit filed that year with the N.C. Industrial Commission, which decides suits against state officials, says Green had accumulated medical bills exceeding $650,000 and needed continuing care from a nursing home.

As of May, Green, 39, was still living in a nursing home, unable to walk or talk.

Perdue, a retired surgeon, said he served as a medical examiner for 37 years. He noted that state guidelines governing how medical examiners carry out their duties say “it is not the ME’s job to pronounce people dead.”

He said he was not disciplined for his handling of Green’s body and voluntarily stepped down as a medical examiner three years later.

A Charlotte Observer investigation published last year found that the state’s 350 examiners often don’t follow recommended practices, raising questions about the accuracy of their rulings.

In most cases, they don’t go to death scenes and sometimes don’t view bodies, two steps experts say are crucial to determining how a person died.

The state doesn’t require training for examiners and rarely punishes them for violating rules. Dr. John Butts, who was state chief medical examiner until he retired in 2010, has publicly supported Perdue and said he did everything required of him.

North Carolina law grants broad protections to public officials who make mistakes in the line of duty.

Bob Bollinger, a Charlotte attorney, said the settlement doesn’t set a new legal precedent but shows the state is willing to negotiate when plaintiffs have a strong case.

Bollinger said he questioned why Green received $425,000. That amount includes roughly $140,000 in fees that will go to the law firm that represented Green, according to records.

“It seems like the state got off easy,” Bollinger said.

But he said there was likely an issue over whether Green’s severe injuries were caused by the medical examiner’s actions or being struck by a car. If Green received Medicaid, which provides health coverage to the disabled, Bollinger said the state could argue taxpayers are already helping pay for his medical treatment.