Baca v. State

• Decision Date: 21 June 2017
• Docket Number: NO. A-1-CA-34640.,A-1-CA-34640.
• Citation: 404 P.3d 789
• Parties: Don R. BACA, Worker-Appellant, v. STATE of New Mexico and Risk Management Division, Employer/insurer-appellee.
• Court: Court of Appeals of New Mexico

404 P.3d 789

Don R. BACA, Worker-Appellant,

v.STATE of New Mexico and Risk Management Division, Employer/insurer-appellee.

NO. A-1-CA-34640.

Court of Appeals of New Mexico.

Filing Date: June 21, 2017

Certiorari Denied, September 26, 2017, S-1-SC-36570

Gerald A. Hanrahan, Albuquerque, NM, for Appellant.

Hatcher Law Group, P.A., Scott P. Hatcher, Mark A. Cox, Santa Fe, NM, for Appellee.

OPINION

TIMOTHY L. GARCIA, Judge

{1} The primary issue in this workers' compensation appeal is the enforceability of the parties' stipulated compensation order (the SCO) that was filed on August 4, 2004. Although much has happened since the SCO was approved and both parties have substantially contributed to the procedural dilemma since 2004, we are able to resolve the present appeal succinctly. We conclude that the workers' compensation judge (the WCJ) was without authority to approve the SCO containing a partial lump-sum payment to Worker because the SCO did not comply with the Workers' Compensation Administration Act (the WCAA), NMSA 1978, §§ 52-5-1 to -22 (1987, as amended through 2013), specifically Section 52-5-12(C). In 2014, when addressing a motion by the State (Employer), the WCJ erred by determining that the SCO was enforceable against Worker. As a result, we reverse and remand this matter to the Workers' Compensation Administration (the WCA) for further proceedings.

BACKGROUND

{2} On August 4, 2004, the parties entered into the SCO to settle a dispute regarding Worker's entitlement to workers' compensation benefits as the result of an accident and injuries to Worker's back that occurred on July 24, 2002. It is undisputed by Employer that no hearing was held by the WCJ to approve the provisions of the SCO or otherwise confirm Worker's knowledge of the partial lump-sum settlement or any of the material facts contained therein. The SCO set Worker's permanent partial disability (PPD) benefits at $193,554.62, offset $54,746.12 for previous PPD benefits paid, allowed a $60,000 partial lump-sum payment to Worker to pay debts, and provided for the remaining PPD benefits to be paid at $250 per week, on a bi-weekly basis, for 315.234 weeks. In 2010, Worker underwent the first of several additional surgeries due to the further deterioration of his back injury. Without any modification of the SCO or Worker's previous 2004 benefits and without any application, hearing, or order of modification pursuant to the Workers' Compensation Act (the Act), NMSA 1978, §§ 52-1-1 to -70 (1929, as amended through 2016) and the WCAA, specifically Section 52-1-56 and Section 52-5-9, Employer unilaterally notified and paid Worker additional workers' compensation indemnity benefits of approximately $92,530.72.

{3} In 2014, Employer filed an application seeking an independent medical examination (IME) of Worker for the purpose of determining his current medical condition, ascertaining whether Worker has attained maximum medical improvement (MMI), whether Worker had an impairment rating, and to determine the reasonableness, necessity, and scope of future medical care. After Employer's application for an IME was addressed and denied by the WCJ, Employer filed a complaint seeking a determination of compensability/benefits and a credit for any overpayment, as well as a motion for supplemental compensation order (the MSCO). In response to the MSCO, Worker asserted that: (1) the SCO was not enforceable because a hearing to approve the SCO was never held; (2) Employer waived any overpayment of additional benefits that Employer had voluntarily paid to Worker pursuant to the provisions of the SCO; and (3) Worker was entitled to a reinstatement of temporary total disability (TTD) payments and a modification of benefits pursuant to Section 52-1-56, Section 52-5-9, Benny v. Moberg Welding , 2007–NMCA–124, 142 N.M. 501, 167 P.3d 949, and also applying Fowler v. Vista Care , 2014–NMSC–019, 329 P.3d 630. Worker also filed a counterclaim for the approval of a spinal cord stimulator, approval of TTD payments until he reached MMI in the future, and approval of PPD payments once MMI was reached in the future. Employer asserted that the issues to be resolved were only legal and that the WCJ could rule from the pleadings without the need for an evidentiary hearing. The WCJ granted Employer's MSCO and ruled that (1) the SCO was enforceable "as written," (2) Employer mistakenly overpaid benefits to Worker, and (3) Worker was required to reimburse Employer for the excess benefits paid in the amount of approximately $92,530.72. Worker timely appealed.

{4} Worker raises four separate arguments on appeal. Worker asserts that the WCJ erred by: (1) failing to mutually apply the principle of waiver to all provisions in the SCO; (2) converting the MSCO into a strictly legal argument and granting summary judgment in favor of Employer; (3) failing to apply the holding in Benny to effectuate a modification of the SCO based upon the parties' actions since 2004; and (4) failing to determine that the SCO was invalid and unenforceable under Sommerville v. Southwest Firebird , 2008–NMSC–034, 144 N.M. 396, 188 P.3d 1147. Because we reverse and remand based upon our determination that the SCO was unenforceable, it is not necessary that we address Worker's other issues at this time.

DISCUSSION

I. The WCJ Erred by Enforcing the SCO

{5} We review "a summary judgment ruling de novo." Id. ¶ 5 ; see Paradiso v. Tipps Equip. , 2004–NMCA–009, ¶ 23, 134 N.M. 814, 82 P.3d 985 ("We therefore review the issue de novo and determine whether the applicable law was correctly applied to the facts."). Depending upon the statutory section in dispute, our appellate courts may still apply principles of liberal construction to the Act and the WCAA as "one of many tools employed in construing legislation." Benavides v. E. N.M. Med. Ctr. , 2014–NMSC–037, ¶ 44, 338 P.3d 1265. When a statute is not clear, "we must attempt to construe [it] according to its obvious spirit or reason." Id. ¶ 24 (internal quotation marks and citation omitted); see Michaels v. Anglo Am. Auto Auctions, Inc. , 1994–NMSC–015, ¶ 13, 117 N.M. 91, 869 P.2d 279 ("There are three points to be considered in the construction of all remedial statutes; the old law, the mischief, and the remedy; that is, how the common law stood at the making of the act; what the mischief was, for which the common law did not provide; and what remedy the parliament hath provided to cure this mischief. And it is the business of the judges so to construe the act as to suppress the mischief and advance the remedy." (internal quotation marks and citation omitted)).

{6} The statutory construction considerations in the present case—the old law, the mischief, and the remedy—regarding lump-sum payments to injured workers have been clearly articulated. Lump-sum payments are specifically disfavored in workers' compensation cases. See § 52-5-12(A) ("It is stated policy for the administration of the [Act] ... that it is in the best interest of the injured worker or disabled employee that the worker or employee receive benefit payments on a periodic basis."); Sommerville , 2008–NMSC–034, ¶ 6, 188 P.3d 1147 ("The Act's express policy is that it is in an injured worker's best interest to receive workers' compensation benefits on a periodic basis, rather than in a lump[-]sum."). As a result, the Legislature has specifically restricted their use. See §§ 52-5-12 to -14; Paradiso , 2004–NMCA–009, ¶ 25, 82 P.3d 985 (emphasizing that "[t]he Legislature set unmistakable policy [when it limited] lump[-]sum payments under the [WCAA]"). These restrictions are aimed at protecting workers from future financial risk. See Sommerville , 2008–NMSC–034, ¶ 7, 188 P.3d 1147 ("Payment of disability benefits in a lump [-]sum creates a risk that the worker will need to rely on public benefits during the time that periodic disability payments would otherwise be available." (alteration, internal quotation marks, and citation omitted)); Cabazos v. Calloway Constr. , 1994–NMCA–091, ¶ 12, 118 N.M. 198, 879 P.2d 1217 ("The chief reason not to grant a lump-sum benefit is that it creates a risk that the worker will need to rely on welfare during the time that periodic disability payments would otherwise be available." (internal quotation marks and citations omitted)).

{7} Section 52-5-12(A) expressly states that "[e]xcept as provided in this section, lump-sum payments in exchange for the release of the employer from liability for future payments of compensation or medical benefits shall not be allowed." (Emphasis added.) As explained in Sommerville :

The [only] two exceptions to this policy are set out in Sections 52-5-12(B) and (C). Both sections allow a worker, with the approval of [the] WCJ, to elect to receive a lump[-]sum payment under specified circumstances. Section 52-5-12(B) permits a worker to elect to receive a lump[-]sum payment award if he or she has returned to work for at least six months and is earning at least eighty percent of his or her pre-injury wage. Section 52-5-12(C) permits a worker who has reached [MMI] to elect to receive a partial lump[-]sum payment for the sole purpose of paying debts that have accumulated during the worker's period of disability.

2008–NMSC–034, ¶ 6, 188 P.3d 1147. Section 52-5-13 requires WCJ approval for all lump-sum settlements and requires the WCJ to "assure that the worker or his dependents understand the terms and conditions of the proposed settlement [.]" Section 52-5-14(A) states,

If the [WCJ] finds the lump-sum payment agreement to be fair, equitable [,] and consistent with the provisions of the [Act,] ... he shall approve the agreement by order[.] ... The [WCJ] may refuse to approve a settlement if he does not believe that it provides substantial justice to the parties.

A. Whether the SCO Was in Compliance With Section 52-5-12(B) and (C)

{8} We first address the two limited exceptions, Sections 52-5-12(B) and (C), that allow a worker to elect, with the approval of the...