Jernigan v. Clark & Day Exploration Co.

• Decision Date: 02 April 1959
• Docket Number: No. 6464,6464
• Citation: 337 P.2d 614,1959 NMSC 33,65 N.M. 355
• Parties: Max O. JERNIGAN, Plaintiff-Defendant in Error, v. CLARK AND DAY EXPLORATION COMPANY and New Amsterdam Casualty Co., Defendants-Plaintiffs in Error.
• Court: New Mexico Supreme Court

Page 614

337 P.2d 614

65 N.M. 355

Max O. JERNIGAN, Plaintiff-Defendant in Error, v. CLARK AND DAY EXPLORATION COMPANY and New Amsterdam Casualty Co., Defendants-Plaintiffs in Error.

No. 6464.

Supreme Court of New Mexico.

April 2, 1959.

Rodey, Dickason, Sloan, Akin & Robb, James C. Ritchie, Albuquerque, for defendants-plaintiffs in error.

Bingham & Klecan, William J. Bingham, Eugene E. Klecan, Albuquerque, for plaintiff-defendant in error.

SADLER, Justice.

The plaintiffs in error complain before this Court of a judgment rendered against them by the district court of Bernalillo County in favor of the defendant in error in purported compliance with the New Mexico Workmen's Compensation Act, 1953 Comp. Sec. 59-10-1 et seq. for compensation at the rate of $30 per week for the period of 550 weeks as and for total permanent disability. Since the position of the parties as movants is reversed in this Court from what it was below, the parties will henceforth be designated in this opinion as they were below.

The plaintiff filed two complaints below for workmen's compensation. One alleged a compensable accident on December 10, 1956, and was given a docket No. 70,719 in the district court. The other alleged a compensable accident on August 15, 1957, and was docketed as cause No. 70,716. Both joined Clark and Day Exploration Company, a partnership, as employers and New Amsterdam Casualty Company, as insurer.

On December 2, 1957, in response to the complaint in cause No. 70,716, the employer and insurer, defendants, filed a motion to dismiss. They alleged as grounds therefor that plaintiff was a partner of Clark and Day Exploration Company; that as such he was an employer and that the compensation act of New Mexico did not contemplate any such combination of employer and employee in one person.

Thereafter, on December 27, 1957, a request for admission of facts was directed to plaintiff and his attorneys, to which answers were filed on January 21, 1958. In effect the answers admitted that the partnership existed as claimed but that it was effective July 1, 1955, instead of July 21, as indicated in the admissions sought. The answers also admitted said partnership was in effect on December 10, 1956. On January 23, 1958, an order was entered, consolidating the two claims for trial.

On the same date, attorneys for plaintiff filed a reply to the motion to dismiss with an affidavit of one of the attorneys attached setting forth that the defendant New Amsterdam Casualty Company, acting through its agent, promised plaintiff that he was covered by the workmen's compensation insurance policy issued by it to Clark and Day Exploration Company; that he had relied upon said promise as protecting him in the event of injury within the scope of his employment.

Likewise, on the same date, to-wit, January 23, 1958, the plaintiff filed a pleading designated 'Amendment to Original Claim' whereby he sought to add as an amendment Count II to the original claims filed alleging that defendant, New Amsterdam Casualty Company, knew that plaintiff was a partner of Clark and Day Exploration Company prior to issuing its policy; that the policy was issued for the express purpose of protecting plaintiff as a workman or employee under the Workmen's Compensation Act of New Mexico; that the casualty company was now estopped to deny its liability to claimant under the policy it had issued to Clark and Day Exploration Company.

On March 11, 1958, after a hearing on the motion to dismiss and the reply thereto, the court entered an order denying the motion without prejudice and providing in the order that the defendant casualty company could raise the issues argued in support of the motion to dismiss at the time of trial and by answer to the complaint. In due course and on March 12, 1958, the defendants answered the claims denying the accidents, and as a fourth defense alleged respecting the amendment to the original claims that it failed to state a claim upon which relief could be granted under the Workmen's Compensation Act of New Mexico; and, among other things, that the court had no jurisdiction to hear the issues raised by the alleged amendment. Prior to trial defendants moved for separate trials which the court denied.

The consolidated causes came on for trial before the court without a jury. It appeared from testimony of the plaintiff, after relating the history of the two accidents on account of which he claimed compensation, that he had nothing to do with the purchase of the two policies, nor did he discuss provisions of the policy with Frizell, the partner who actually procured the policy.

Counsel for defendants in cross-examining plaintiff limited themselves to questions concerning the issue of the relationship of plaintiff to the partnership. At the conclusion of this limited cross-examination of plaintiff, attorney Ritchie, as one of defense counsel, moved orally for dismissal on the ground it was evident from testimony of plaintiff he was a partner of Clark and Day Exploration Company and not a workman or employee thereof under Workmen's Compensation Act. The motion was taken under advisement by the trial judge until he had heard Werntz, the insurance agent through whom the policy was procured.

Attorney Ritchie announced at this time he had not finished his cross-examination of plaintiff, having confined himself to issue of the partnership, but that they would defer further cross-examination until the court had ruled on their motion. The direct examination of Mr. Werntz was then conducted, defense counsel persisting in the objection to any questions regarding the workmen's compensation policy as being immaterial to the issues.

At the conclusion of the testimony of Werntz, a physician was called and testified regarding plaintiff's physical condition, which is irrelevant to the issues on this appeal. The trial court, after having heard Wertnz' testimony indulged in the following colloquy with counsel, to-wit:

'The Court: The Court is convinced that the general law is to the effect in the majority holdings that a partner cannot be a recipient of benefits under the Workmen's Compensation Act in the State of New Mexico and our Supreme Court has never spoken on that particular question. Even though our workmen's compensation law in New Mexico, we will assume for the sake of argument, does not include partners unless they are under a contract of hire and actually working partners. The Court is still of the opinion that an insurance carrier of workmen's compensation and a contractor employee, such as this partnership, can enter into a contract to cover such partners. Therefore, your motion to dismiss will be denied. You may proceed.

'Mr. Ritchie: Now as I understand the ruling of the Court, the Court has ruled that a working----

'The Court: Your motion to dismiss is denied.

'Mr. Ritchie: In your finding I am interested in this for purposes of the record and the future conduct.

'The Court: When I decide the issues involved, then we will make our findings, I am just merely making that as the statement of the Court at this time.

'Mr. Ritchie: And it is your belief that a working partner is not an employee under the workmen's compensation law?

'The Court: I believe that the general law is to that effect but I still believe likewise that an insurance carrier can contract with a partnership to cover all the partners, if they so desire, on a contractual basis, that is what I am getting at.

'Mr. Ritchie: And that, so far as you are concerned is the determining issue?

'The Court: Right.

'Mr. Ritchie: In this cause?

'The Court: Right.

'Mr. Ritchie: And you are not determining at this time whether or not under the facts as you have thus far heard them there was a contract to cover them?

'The Court: Not until the case is concluded.'

Thereupon, the plaintiff produced in evidence the deposition of Jack A. Frizell, one of the partners and rested his case. Counsel for defense again moved orally for a dismissal, in effect, renewing motions previously made, and, in addition, reminding the court that the Workmen's Compensation Act was sui generis and created rights, remedies and procedures unknown to the common law which it was said are exclusive, and making other arguments against the amendment proposed by plaintiff. At the conclusion of this argument the court announced, 'The amendment will be made to conform with the evidence.'

After this announcement by the court, the defendants put on no further evidence, merely concluding their cross-examination of plaintiff and limiting that to the disability of plaintiff. Court was recessed during such cross-examination until 9:30 a. m., the following day. Upon reconvening the following morning, a colloquy between court and counsel took place, as follows, to-wit:

'Mr. Ritchie: May it please the Court, comes now the defendant, New Amsterdam Casualty Company, and hereby withdraws from any further participation in this cause and respectfully declines to present any evidence in this cause and as grounds therefor states that the Court having allowed a trial amendment in the form as alleged in the amendment to the complaint filed herein by the claimant conforming the pleadings to the proof and having ruled that the cause is one of contract between the claimant, Max O. Jernigan, and the defendant, New Amsterdam Casualty Company, that being a severable cause of action and removable under the removal statutes of the District Court of the United States and the defendant, New Amsterdam Casualty Company, at this time is proceeding with a removal proceeding of the cause of action as alleged in the amendment allowed by the Court and declines to proceed further.

'The Court: Very well, the Court was under the impression that you had concluded your case, therefore, the ruling of the Court probably was premature, however, the Court withdrew its ruling and allowed you to proceed to submit evidence to substantiate your...