Mares v. Valencia County Sheriff's Dept., 9847

Citation1988 NMCA 3, 749 P.2d 1123, 106 N.M. 744
Case DateJanuary 12, 1988
CourtCourt of Appeals of New Mexico
[106 NM 746] Fe, for appellants & third-party defendants-appellants

DONNELLY, Chief Judge.

This case involves the proper method for determining the liability of the Subsequent Injury Fund (Fund), where the employer and its insurance carrier enter into a settlement with an injured worker, and both subsequently seek reimbursement from the Fund under the Subsequent Injury Act (SIA).

The Fund appeals from a judgment awarding plaintiff, Raymond E. Mares (Mares), compensation benefits, ordering reimbursement and apportioning liability for worker's compensation benefits between the Fund, Valencia County Sheriff's Department (employer), and its insurance carrier, Rockwood Insurance Company (Rockwood). We discuss: (1) whether the trial court's findings and conclusions as to disability and apportionment of liability are supported by substantial evidence and whether it was error to order reimbursement in excess of the Fund's apportioned liability; (2) whether the trial court erred in its award of medical expenses; (3) whether there was error as to the award of attorney fees; and (4) whether the Fund is an entity of the state which is exempt from payment of postjudgment interest. We reverse and remand for further proceedings.

Mares was injured in November 1982, while working as a detective in the Valencia County Sheriff's Office. Following treatment for a back injury he returned to work; however, in June 1983, he again was injured. Mares underwent treatment and on resumption of employment was assigned to light duty activities. Due to his physical limitations he subsequently terminated his employment. Mares then filed suit against his employer and Rockwood. Thereafter, employer and Rockwood filed a third-party complaint against the Fund.

In January 1985, employer and Rockwood, without participation by the Fund, negotiated a court-approved settlement with Mares. Mares subsequently filed an amended complaint joining the Fund as a defendant to the action. Employer and Rockwood, through their third-party complaint, sought reimbursement from the Fund for a portion of the monies previously paid to Mares. Mares, through his direct action, sought installment payments for which the Fund is liable. Following trial on the merits, the trial court entered a judgment ordering that the Fund reimburse Rockwood for 90% of all amounts previously paid to Mares, except for the initial eight-week period for which Rockwood was solely responsible for payment of benefits; directed that the Fund pay 80% of all future compensation benefits payable to Mares, together with 80% of all reasonable medical and vocational expenses; awarded Mares $14,000 in attorney fees; and ordered the Fund to pay costs and interest on the judgment.


Initially, the Fund urges that this court reconsider its opinions in Romero v. Cotton Butane Co., 105 N.M. 73, 728 P.2d 483 (Ct.App.1986) and Duran v. Xerox Corp., 105 N.M. 277, 731 P.2d 973 (Ct.App.1986). In those decisions, we found that a settlement between a worker and his employer or its insurance carrier did not preclude a further adjudication of the Fund's liability to the worker. We concluded that liability of the Fund for compensation benefits was coexistent with the liability of the employer, and that the legislature contemplated settlement between the worker and his employer without foreclosing a subsequent adjudication and apportionment of the Fund's liability. Moreover, in Duran we found that an employer, following settlement with the worker, could also proceed against the Fund for reimbursement to the extent it paid in excess of its apportioned liability. It is the policy of this state to favor settlements whenever feasible. Ambassador Ins. Co. v. St. Paul Fire & Marine Ins. Co., 102 N.M. 28, 690 P.2d 1022 (1984); Gonzales v. Atnip, 102 N.M. 194, 692 P.2d 1343 (Ct.App.1984); see Ratzlaff v. Seven Bar Flying Serv., Inc., 98 N.M. 159, 646 P.2d 586 (Ct.App.1982). We reaffirm our rulings in Romero and Duran.

A. Sufficiency of the Findings

The Fund argues that a conflict exists between the trial court's judgment and certain findings and conclusions. The Fund also argues that conclusion of law no. 8, providing that the Fund should be responsible for 80% of the benefits payable to Mares, does not find support in the trial court's findings of fact and conflicts with the judgment. We agree.

Although it found Mares totally and permanently disabled, the trial court failed to make in its decision any finding of apportionment as between the employer and the Fund. While the trial court did conclude that the employer was 20% liable and the Fund 80% liable, no finding supports these conclusions. In contrast to these findings and conclusions, the judgment orders the Fund to reimburse the employer for 90% of all amounts it paid Mares.

On appeal, we are bound by the trial court's findings of fact unless they are demonstrated to be clearly erroneous or not supported by substantial evidence. Roybal v. Morris, 100 N.M. 305, 669 P.2d 1100 (Ct.App.1983); see State ex rel. Goodmans Office Furnishings, Inc. v. Page & Wirtz Constr. Co., 102 N.M. 22, 690 P.2d 1016 (1984). Findings of fact, however, which are insufficient or induced by an error of law cannot stand. Walker v. L.G. Everist, Inc., 102 N.M. 783, 701 P.2d 382 (Ct.App.1985). Similarly, a judgment cannot be sustained unless the conclusions upon which it is based finds support in one or more findings of fact. Watson Land Co. v. Lucero, 85 N.M. 776, 517 P.2d 1302 (1974); Roybal v. Chavez Concrete & Excavation Contrs., Inc., 102 N.M. 428, 696 P.2d 1021 (Ct.App.1985). If findings are inconsistent and cannot be reconciled, an appellate court may remand for additional or amended findings. See SCRA 1986, 1-052(B)(1)(g); see also Michelson v. Michelson, 89 N.M. 282, 551 P.2d 638 (1976); Jaramillo v. Jaramillo, 103 N.M. 145, 703 P.2d 922 (Ct.App.1985), appeal after remand, Seeley v. Jaramillo, 104 N.M. 783, 727 P.2d 91 (Ct.App.1986).

In a worker's compensation case where the Fund has been joined as a party, and where it is alleged that the Fund is liable for payment of a portion of the worker's disability, the trial court is required to adopt a finding of fact based upon the evidence, specifically apportioning the extent of liability, if any, between the employer or its insurance carrier and the Fund. See Duran v. Xerox Corp.; Romero v. Cotton Butane Co.; Smith v. Trailways, Inc., 103 N.M. 741, 713 P.2d 557 (Ct.App.1986); see also NMSA 1978, Sec. 52-2-11. Apportionment of liability involves a judicial determination of the extent of the employer's liability under the Workmen's Compensation Act, and the amount of compensation due the worker for the combined disability. Duran v. Xerox Corp.; see also Ballard v. Southwest Potash Corp., 80 N.M. 10, 450 P.2d 448 (Ct.App.1969).

In apportioning the degree of disability between an employer and the Fund, the trial judge is not bound by the expert medical testimony presented and may properly reject all opinions of the experts and determine a different allocation or percentage, so long as the court's finding is reasonably within the range of the testimony presented. Ideal Basic Industries, Inc. v. Evans, 91 N.M. 460, 575 P.2d 1345 (1978); Chapman v. Jesco, Inc., 98 N.M. 707, 652 P.2d 257 (Ct.App.1982); Romo v. Raton Coca Cola Co., 96 N.M. 765, 635 P.2d 320 (Ct.App.1981). An appellate court will not second-guess the fact finder as to any finding making an apportionment of liability, if the apportionment is supported by substantial evidence. See Marcus v. Cortese, 98 N.M. 414, 649 P.2d 482 (Ct.App.1982).

In Second Injury Fund v. Mich Coal Co., 274 N.W.2d 300 (Iowa 1979), the Iowa Supreme Court considered the issue of whether it was error for an administrative hearing officer to omit the adoption of a finding of fact specifically determining the extent of plaintiff's disability and the apportionment of liability between the second injury fund and the employer for a prior injury. There, the court reversed and remanded the case to the commissioner for further proceedings, observing:

[T]he deputy [commissioner] made no finding of fact as to degree of disability related to the body as a whole which resulted from the 1972 injury. This finding appears crucial to us to determine the obligations of the employer and the fund * * * * The fact findings stated the two injuries and amounts received by claimant but did not identify the degree to which the [second] injury was involved in the 80% disability of the body as a whole.

Id. at 303. See also Brozek v. Lincoln County Highway Dep't, 10 Kan.App.2d 319, 698 P.2d 392 (1985) (holding that in a subsequent injury case where the employer settles with the workman, the fact finder must specifically determine the extent of the fund's liability based on the evidence of the degree the disability is attributable to the...

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