1997 -NMCA- 78, Martinez v. Eight Northern Indian Pueblo Council, Inc.

• Decision Date: 27 June 1997
• Docket Number: No. 17754,17754
• Parties: , 1997 -NMCA- 78 Ezechiel MARTINEZ, Worker-Appellant, v. EIGHT NORTHERN INDIAN PUEBLO COUNCIL, INC., and New Mexico Mutual Casualty Company, Employer/Insurer-Appellees.
• Court: Court of Appeals of New Mexico

Page 906

944 P.2d 906

123 N.M. 677, 1997 -NMCA- 78

Ezechiel MARTINEZ, Worker-Appellant, v. EIGHT NORTHERN INDIAN PUEBLO COUNCIL, INC., and New Mexico Mutual Casualty Company, Employer/Insurer-Appellees.

No. 17754.

Court of Appeals of New Mexico.

June 27, 1997.

Certiorari Granted Aug. 18, 1997.

Harold Worland, Albuquerque, for Worker-Appellant.

Richard J. Shane, Deborah S. Dungan, Padilla, Riley & Shane, P.A., Albuquerque, for Employer/Insurer-Appellees.

OPINION

PICKARD, Judge.

¶1 NMSA 1978, Section 52-1-54 (Cum.Supp.1996) governs attorney fees in workers' compensation cases. Section 52-1-54(C) permits the workers' compensation judge to fix a fee when its jurisdiction is invoked to approve a settlement. Section 52-1-54(H) requires the judge, in setting the fee, to "consider only those benefits to the worker that the attorney is responsible for securing." The question we addressin this case is whether a determination that Employer is not entitled to reimbursement under NMSA 1978, Section 52-5-17 (Repl.Pamp.1991) (effective January 1, 1991) is a benefit to Worker that should be considered by the judge in setting the fee. Under the facts of this case as demonstrated by the record below, we hold that it is. To the extent that the judge below held as a matter of law that such a benefit could not be considered, we hold that she erred.

¶2 Worker was injured in a work-related automobile accident in which his co-worker was the driver and he was the passenger. Although Employer paid some compensation benefits, Worker disputed the amount and filed several claims for various benefits. While these claims were pending, Worker received $50,000 from the insurance company that insured the car the co-worker was driving at the time of the accident. When the mediator on the compensation claims indicated that subrogation or reimbursement would be an issue, Worker filed a "Petition for Declaratory Judgment," seeking a ruling from the workers' compensation judge that Employer was not entitled to any reimbursement. The judge treated this pleading as a motion for summary judgment and denied it. Worker appealed, and this Court dismissed the appeal on the ground that denials of motions for summary judgment are not appealable final orders. On remand, Worker indicated that he intended to pursue a claim for bad faith in Employer's counsel's handling of Worker's claims, and Employer defended Worker's claims contending that it had paid maximum benefits and that it was entitled to a portion of the $50,000 Worker received from the insurance company as reimbursement of these amounts.

¶3 The parties ultimately settled the merits of all outstanding claims. Because of this settlement, we do not discuss the merits of Employer's claim to reimbursement or Worker's claim of bad faith. The settlement included provisions that Employer would pay Worker lump sum amounts totaling approximately $7500 plus two years of open medicals, that Worker would give up any future compensation or medical benefits, that Employer would waive any right to reimbursement from the $50,000 Worker received from the insurance company, and that Worker would waive any claim for bad faith. Worker's attorney sought fees of over $13,000, which included time devoted to the reimbursement issue. The judge found that the full benefit to Worker was $7500 and that the $50,000 from the insurance company was subject to its own fee agreement. She awarded fees of $1500 based on a finding that 20% of the amount obtained as workers' compensation benefits was fair and reasonable considering all the factors in the case.

¶4 Worker appealed. Our understanding of the judge's findings and conclusions was that she did not consider Worker's attorney's efforts in preserving the $50,000 from Employer's reimbursement claim to have resulted in a "benefit" to Worker entitling the attorney to fees under the Workers' Compensation Act. However, because the findings and conclusions did not specifically and clearly address the issue, we remanded the case to the judge with instructions to answer the following question:

Whether the decision on attorney fees was based on:

1) a legal ruling that preserving the tort recovery from the reimbursement claim was not a "benefit" that permitted the award of attorney fees under NMSA 1978, Section 52-1-54 (Cum.Supp.1996); and/or

2) a factual ruling that the attorney's efforts in preserving the tort recovery from the reimbursement claim were already sufficiently compensated by the agreed-upon fee in the tort case; and/or

3) some other factor or factors and, if so, that factor or those factors should be specified in the order.

The judge did not specifically answer our question, and instead she entered further findings and conclusions. Among the additional findings and conclusions were that: (1) the insurance recovery was never at risk, so that the attorney did not preserve anything; (2) the tort recovery is not a "workers' compensation benefit subject to reimbursement rights under" Section 52-5-17; (3) any additional award of fees would result in Worker paying twice for the same money; and (4) the attorney has been sufficiently compensated for "obtaining" the $50,000.

¶5 The items we have labeled (1) and (2) appear to be both wrong and irrelevant to the question on appeal. They are wrong because reimbursement under Section 52-5-17 was very much in issue below and in the prior appeal, and they are irrelevant because those questions have been settled and the question now before us is whether the attorney may receive fees for his work in preserving the tort recovery from the reimbursement claim. The item we have labeled (3) assumes that the fee agreement in the tort case was intended to cover the reimbursement claim, but there was no evidence presented below (or any suggestion on appeal) on this question. The item we have labeled (4) is also irrelevant because the question before us does not concern the "obtaining" of the $50,000, but rather the preservation of it from the reimbursement claim. The judge not having clarified that she denied further fees on the basis of a factual ruling, we review the merits of her apparent legal ruling. On that ruling, we reverse.

¶6 Worker contends on appeal that the fact that the $50,000 insurance recovery was the subject of its own fee agreement is irrelevant and that his attorney should nonetheless be entitled to some fee for preserving both it and the compensation benefits for Worker. We agree for the most part with Worker's contentions because: (1) the language of Section 52-1-54(H) appears to support an award of fees in this situation; (2) we find nothing in the statutory language that would preclude it; (3) past cases do not limit attorney fees to increases in monetary compensation benefits, but rather allow fees for other benefits obtained for the worker by the attorney; and (4) there was no showing below or contention on appeal that the attorney fee agreement for the $50,000 insurance recovery was intended to cover the reimbursement claim.

¶7 Section 52-1-54(C) and (E) require the workers' compensation judge to set a reasonable attorney fee in the various situations in which litigated cases or settlements are presented to them. Section 52-1-54(H) states that, in determining the fee, "the workers' compensation judge shall consider only those benefits to the worker that the attorney is responsible for securing." Although this language appears to be a limitation (instructing judges not to award fees for work attorneys do that does not result in any benefit), the clear import of it is that attorneys should be compensated for their work that does result in securing a benefit.

¶8 Apart from (1) the foregoing limitation, (2) a limitation contained in the second sentence of Section 52-1-54(H) stating that the value of future medicals shall not be considered, and (3) a limitation contained in Section 52-1-54(I) on the total amount of attorney fees allowed, we find nothing in any of the provisions of the workers' compensation act that would expressly preclude an award of attorney fees when an attorney protects a worker's recovery of both compensation benefits and insurance proceeds from a tort claim. Nor does Employer point us to any such language.

¶9 In an unbroken line of cases under predecessor attorney fees statutes, our courts have held that the recovery of compensation is a prerequisite to the award of attorney fees. See Sanchez v. Siemens Transmission Sys., 112 N.M. 533, 534, 817 P.2d 726, 727 (1991); Perez v. Fred Harvey, Inc., 54 N.M. 339, 346, 224 P.2d 524, 528 (1950). Nonetheless, throughout this same time, scattered on the landscape of this state's workers' compensation law are casesto the effect that attorney fees may be awarded when the attorney secures some benefit to the worker, even if that benefit does not appear to be a monetary increase in the amount of workers' compensation benefits.

¶10 Thus, for example, in Mann v. Board of County Commissioners, 58 N.M. 626, 632-33, 274 P.2d 145, 150 (1954), a modest fee was awarded for services on appeal that resulted in an increase in the duration of the benefits although it appeared that the aggregate sum was the same as that awarded below. In so ruling, the Supreme Court said, "[the statute] does not confine us ... to instances where [the attorney's] services produce increased compensation. Other rights sometimes of equal importance, may be determined in [worker's] favor ... [for which] we may allow an additional attorney's fee." Id. at 633, 274 P.2d at 150, 58 N.M. at 631, 274 P.2d at 150.

¶11 Mann was expressly followed in Romo v. Raton Coca Cola Co., 96 N.M. 765, 768-70, 635 P.2d 320, 323-25 (Ct.App.1981), in which the attorney's servicesrelated to overturning a stay of execution pending appeal; Graham v. Presbyterian Hospital Center, 104 N.M. 490, 493, 723 P.2d 259, 262 (Ct.App.1986), in which the attorney's services related to overturning an order...