Leonard v. Payday Professional

• Decision Date: 07 August 2007
• Docket Number: No. 26,740.,No. 26,787.,26,787.,26,740.
• Citation: 168 P.3d 177,2007 NMCA 128
• Parties: Cynthia LEONARD, Worker-Appellee/Cross-Appellant, v. PAYDAY PROFESSIONAL and Bio-Cal Comp., Employer/Insurer-Appellee, and CNA Unisource and Continental Casualty Company, Employer/Insurer-Appellant/Cross-Appellee.
• Court: Court of Appeals of New Mexico

168 P.3d 177

2007 NMCA 128

Cynthia LEONARD, Worker-Appellee/Cross-Appellant, v. PAYDAY PROFESSIONAL and Bio-Cal Comp., Employer/Insurer-Appellee, and CNA Unisource and Continental Casualty Company, Employer/Insurer-Appellant/Cross-Appellee.

No. 26,787.

No. 26,740.

Court of Appeals of New Mexico.

August 7, 2007.

Patrick Larkin Fogel, Albuquerque, NM, for Appellee/Cross-Appellant.

French & Associates, P.C., Katherine E. Tourek, Albuquerque, NM, for Appellee.

Hatch, Allen & Shepherd, P.A., Kimberly A. Syra, Albuquerque, NM, for Appellant/Cross-Appellee.

OPINION

BUSTAMANTE, Judge.

{1} This is a workers' compensation case in which Worker suffered two injuries to her back, each while working for a different employer. The case presents two issues: (1) whether the Workers' Compensation Judge (WCJ) erred by apportioning Worker's nonsurgical medical expenses evenly between the two employers, yet apportioning all surgical expenses to the second employer; (2) whether the WCJ erred in denying Worker's motion for attorney fees on the ground that Worker's offer of judgment had no legal effect. The issues were raised in separate appeals and later consolidated under Case No. 26,787.¹

{2} We affirm the WCJ's ruling on apportionment because it was not contrary to law and because substantial evidence supports the ruling. We also affirm the WCJ's ruling on attorney fees.

BACKGROUND

{3} On December 11, 1997, Worker suffered an injury to her back while working for Payday Professional (Payday). Worker received treatment from Dr. Reeve, which included chiropractic care, epidural injections, and pain-relieving medication. An MRI scan showed that Worker had disc degeneration and possibly a disc herniation. Worker continued to work full-time following her injury. Dr. Reeve pursued a "conservative" course of treatment in which surgery was an option but was not required. On May 20, 1998, Dr. Reeve placed Worker at maximum medical improvement (MMI) and gave her a 10% whole body impairment rating. Worker continued periodic treatment with Dr. Reeve and reported occasional pain and discomfort.

{4} On November 4, 1999, Worker suffered a second injury while working for a different employer, CNA Unisource (CNA). Worker stated that she did not recover from the second injury to the same extent that she had recovered from the first, and that the pain from the second injury was more severe. The second injury aggravated her previous injury and may have caused additional disc movement. Dr. Reeve referred Worker to Dr. Claude Gelinas, an orthopedic surgeon, for an examination. Dr. Gelinas ordered a second MRI and, after reviewing it, determined that Worker had a disc disease that existed prior to her first injury. According to Dr. Gelinas, the 1997 injury aggravated the pre-existing condition and the 1999 injury re-aggravated the condition. Dr. Gelinas recommended that Worker undergo "a one-level fusion operation at L5-S1." Dr. Gelinas was reluctant to estimate the degree to which each of Worker's injuries contributed to her back condition, but concluded that surgery probably would not have been necessary had Worker not suffered her second injury. However, Dr. Gelinas also stated that the changes he noted in the second MRI could have occurred even if the second injury had not taken place. Dr. Reeve testified that Worker's ongoing symptoms were 70% attributable to the first injury and 30% attributable to the second.

{5} On April 27, 2005, Worker filed separate workers' compensation complaints against CNA and Payday seeking medical treatment. The cases were eventually consolidated by stipulation of the parties. The parties entered into mediation discussions but could not resolve the issue of each employer's liability for Worker's medical benefits. In the interest of having surgery performed at the earliest possible date, the mediator recommended that Payday and CNA each pay 50% of the cost of surgery with a complete reservation of rights. Worker and Payday accepted the mediator's recommended resolution, but CNA rejected it.

{6} On February 8, 2006, Worker sent an offer of judgment to counsel representing each employer. The offer stated the following terms:

1. Worker will withdraw her complaint if the employer/insurers[ ] will pay for the medical treatment prescribed by the Worker's authorized [healthcare professional] to include any back surgery prescribed by Dr. Gelinas.

2. In addition, Worker's attorney, in the event of acceptance of this offer, will reduce his attorney fees awarded by the court by five percent (5%), two and one-half percent (2½%) to the Worker and two and one-half percent (2½%) to the employer/insurers[ ].

The offer expired without a response from either Payday or CNA.

{7} After hearing testimony and reviewing the evidence, the WCJ entered his compensation order on April 19, 2006. The WCJ made the following pertinent findings of fact in the compensation order:

13. Worker had a need for non-surgical medical care following the accident of December 11, 1997.

14. Worker had a need for both non[-]surgical and surgical medical care following the accident of November [4, 1999].

15. Worker had reached maximum medical improvement on May 20, 1998, following the accident of December 11, 1997.

16. Worker's symptoms increased markedly after the accident of November 4, 1999.

....

18. As a direct and proximate result of the accident[s] of December 11, 1997 and November 4, 1999, to a reasonable medical probability, Worker suffered an injury to the whole person. The nature of the injury is exacerbation of degenerative disk [sic] disease and spondylolisthesis at the L5-S1 level.

19. The November 4, 1999, accidental injury was a re-injury [of] the conditions suffered in the accident of December 11, 1997.

The WCJ then made the following conclusions:

12. Worker's need for non[-]surgical medical care is the result of both accidents in this case, and there is overlap in medical benefits as a result.

13. Non[-]surgical medical benefits should be apportioned equally between Employers and Insurers, as a result of overlap in medical care.

14. Worker's need for surgical medical care is the result of the second accident, and there is no overlap in surgical medical benefits.

15. Surgical medical benefits should not be apportioned, as they are exclusively the result of the second accident.

16. Surgical medical benefits should be provided and paid for by CNA[.]

{8} Worker thereafter filed a motion for attorney fees requesting that the employers pay the full sum of her attorney fees based upon their rejection of her offer of judgment. The WCJ entered an order granting Worker's attorney fees on May 11, 2006. However, the WCJ rejected Worker's request that the employers pay all of her attorney fees because "Worker's Offer of Judgment has no legal effect because it would not have disposed of the merits of the case." The WCJ ruled instead that Worker was responsible for 50% of her attorney fees, Payday was responsible for 12.5%, and CNA was required to pay 37.5%.

{9} CNA filed a notice of appeal and challenges the WCJ's apportionment ruling in the compensation order. Worker filed a notice of appeal challenging the WCJ's award of attorney fees.

DISCUSSION

I. Standard of Review

{10} We review workers' compensation orders using the whole record standard of review. Tallman v. ABF (Arkansas Best Freight), 108 N.M. 124, 126, 767 P.2d 363, 365 (Ct.App.1988), modified on other grounds by Delgado v. Phelps Dodge Chino, Inc., 2001-NMSC-034, 131 N.M. 272, 34 P.3d 1148. Whole record review "contemplate[s] a canvass by the reviewing court of all the evidence bearing on a finding or decision, favorable and unfavorable, in order to determine if there is substantial evidence to support the result." Id. at 128, 767 P.2d at 367. We may not "substitute [our] judgment for that of the administrative agency," and we view "all evidence, favorable and unfavorable, ... in the light most favorable to the agency's decision." Id. at 129, 767 P.2d at 368. We will affirm the agency's decision if, after taking the entire record into consideration, "there is evidence for a reasonable mind to accept as adequate to support the conclusion reached." Id. at 128, 767 P.2d at 367. We review the WCJ's application of the law to the facts de novo. Tom Growney Equip. Co. v. Jouett, 2005-NMSC-015, ¶ 13, 137 N.M. 497, 113 P.3d 320.

II. Apportionment

{11} CNA attacks the WCJ's apportionment ruling on two grounds. First, CNA argues that the WCJ erred as a matter of law by separately apportioning Worker's surgical and non-surgical medical expenses. More specifically, CNA claims that: (1) "it is inconsistent and contrary to logic for Worker's ... second injury to be `causally connected' to her first injury for some treatment modalities but not others," (2) Payday is not "totally immune" from liability for surgical expenses, and (3) "there is no basis in New Mexico workers' compensation law for such treatment-specific . . . apportionment." Second, CNA maintains that the WCJ's findings of fact are not supported by substantial evidence.

{12} Apportionment of benefits among multiple employers for a worker's successive injuries is authorized by NMSA 1978, § 52-1-47(D) (1990). Jouett, 2005-NMSC-015, ¶ 42, 137 N.M. 497, 113 P.3d 320. "When a disability develops gradually, or when it comes as the result of a succession of accidents, the [employer or] insurance carrier covering the risk at the time of the most recent injury or exposure bearing a causal relation to the disability is usually liable for the entire compensation." Id. ¶ 24 (internal quotation marks and citation omitted). However, under Section 52-1-47(D), "the current employer's liability is reduced to the extent of benefits paid or payable for disability resulting from the first accidental injury." Jouett, 2005-NMSC-015, ¶ 46, 137 N.M. 497, 113 P.3d 320 (internal quotation marks and citation omitted). Section 52-1-47(D)...