McCaul v. Ean Holdings LLC

• Decision Date: 11 September 2018
• Docket Number: No. A-1-CA-35061,A-1-CA-35061
• Parties: LEANNE MCCAUL, Worker-Appellant, v. EAN HOLDINGS LLC, and FIDELITY & GUARANTEE INSURANCE CO., Employer/Insurer-Appellees.
• Court: Court of Appeals of New Mexico

LEANNE MCCAUL, Worker-Appellant, v. EAN HOLDINGS LLC, and FIDELITY & GUARANTEE INSURANCE CO., Employer/Insurer-Appellees.

No. A-1-CA-35061

COURT OF APPEALS OF THE STATE OF NEW MEXICO

September 11, 2018

This memorandum opinion was not selected for publication in the New Mexico Appellate Reports. Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. Please also note that this electronic memorandum opinion may contain computer-generated errors or other deviations from the official paper version filed by the Court of Appeals and does not include the filing date.

APPEAL FROM THE WORKERS' COMPENSATION ADMINISTRATION

Shannon Riley, Workers' Compensation Judge

Dorato & Weems LLC

Derek Weems

Albuquerque, NM

for Appellant

Hoffman Kelley Lopez L.L.P.

Jeffrey Federspiel

Albuquerque, NM

for Appellee

MEMORANDUM OPINION

ATTREP, Judge.

{1} Worker Leanne McCaul appeals from an order of the Workers' Compensation Judge (the WCJ), denying Worker's request for sanctions against EAN Holdings LLC and Fidelity & Guarantee Insurance Company (collectively, Employer/Insurer) for unfair claim-processing practices under the Workers' Compensation Act (the Act), NMSA 1978, §§ 52-1-1 to -70 (1929, as amended through 2017). Worker argues that the WCJ erred on two grounds: (1) in determining there was no unfair claims processing in this case, and (2) in awarding less than fifteen percent post-judgment interest under NMSA 1978, Section 56-8-4(A)(2) (2004). We affirm. Because this is a nonprecedential, memorandum opinion, we set forth only such facts and law as are necessary to decide the merits.

BACKGROUND

{2} The WCJ approved Worker's petition for partial lump sum payment for debts at a hearing on March 25, 2015, requiring Employer/Insurer to pay Worker a lump sum for repayment to the Social Security Administration. An agreed form of order was filed on April 23, 2015 (the Lump Sum Order). It is questionable whether the Workers' Compensation Administration (the WCA) ever sent copies of the Lump Sum Order to the parties. On July 9, 2015, Worker's attorney located a copy of the Lump Sum Order and forwarded it to Employer/Insurer's attorney requesting payment. Employer/Insurer did not respond to this inquiry. On July 23, 2015, and again on August 4, 2015, Worker's attorney emailed Employer/Insurer'sattorney the Lump Sum Order and asked for a status on the check. Employer/Insurer did not respond to these inquiries.

{3} On August 12, 2015, Worker filed an application to enforce order approving lump sum advancement (the Application) seeking, inter alia: (1) enforcement of the Lump Sum Order, (2) an order finding unfair claim-processing practices and awarding a ten percent penalty payable directly to Worker, (3) an award of 8.75 percent post-judgment interest from July 9, 2015, to the date the check is delivered, and (4) an award of attorney's fees of $750.00 paid entirely by Employer/Insurer. The Application attached the email correspondence from Worker's attorney to Employer/Insurer's attorney as outlined above. Employer/Insurer did not file a written response to the Application or otherwise respond to the Application prior to the hearing on the Application.

{4} The WCJ held a hearing on the Application on September 2, 2015. No evidence was admitted at this hearing. Counsel for Worker and counsel for Employer/Insurer, instead, proceeded by making representations and argument. No party objected to this approach before the WCJ, and no party has challenged on appeal the WCJ's reliance on the representations and argument of counsel.

{5} At the hearing, Worker's attorney reiterated the contents of the Application. Employer/Insurer's attorney offered an explanation for the delay in payment. Employer/Insurer's attorney explained that he received the Lump Sum Order inJuly from Worker's attorney. Since then, Employer/Insurer's attorney had corresponded with the adjuster, and the adjuster had sent him a payment history so he could ensure no double payments were made. Employer/Insurer's attorney verified that the check could be issued approximately one week to ten days before the hearing and discussed issuing the check with the adjuster. Employer/Insurer's attorney stated that the adjuster had issued the check the day of the hearing with ten percent interest dating back to April 23, 2015, the date the Lump Sum Order was filed. Worker's attorney did not object to Employer/Insurer's attorney making the foregoing representations, otherwise challenge the reasonableness of Employer/Insurer's attorney's representations, or present any evidence or further representations in rebuttal. Instead, Worker's attorney argued that the delay nonetheless amounted to unfair claims processing.

{6} In making her ruling, the WCJ stated that she personally knew the WCA clerk's office was not sending out orders around the time the Lump Sum Order was issued and that she did not want to penalize Employer/Insurer for the WCA's error. The WCJ determined that there was no unfair claims processing in this case because there was no fault by either party. Worker's attorney then specifically requested a ruling from the WCJ as to whether the evidence of Employer/Insurer's conduct after July 9, 2015—i.e., email inquiries regarding the status of the check, the filing of the Application, and no response by Employer—was sufficient tomake out a claim for unfair claims processing. The WCJ made note that the argument of counsel is not evidence, yet proceeded, without objection from the parties, to base her ruling on the representations of counsel. The WCJ ruled that she did not believe this situation rose to the level of unfair claims processing because Employer/Insurer's attorney had to check that there was no double payment, and the WCJ believed Employer/Insurer's attorney was in fact doing this research and was diligently trying to get the matter resolved. Worker's attorney, at the request of the WCJ, prepared the written Order memorializing the WCJ's ruling, which was filed on September 18, 2015. The Order denied Worker's unfair claims processing claim but awarded post-judgment interest of ten percent from April 23, 2015, and attorney's fees to be paid fifty percent by Employer/Insurer and fifty percent by Worker. This appeal followed.

DISCUSSION

I. Unfair Claim-Processing Practices

{7} The parties dispute whether Worker preserved her unfair claims processing claim for appellate review, and whether the WCJ erred in deciding that there was no unfair claims processing in this case.

A. Worker Preserved Her Unfair Claims Processing Claim

{8} Employer/Insurer argues that Worker failed to preserve the issue of unfair claims processing for appeal because Worker did not request findings of fact orconclusions of law. In this case, Worker's attorney asked for a ruling on the unfair claims processing claim, specifically inquiring why the facts presented did not rise to the level of unfair claims processing. Worker's counsel then prepared an order, at the direction of the WCJ, memorializing the WCJ's decision denying Worker's unfair claims processing claim. This is sufficient to preserve the issue of whether the WCJ erred in denying Worker's unfair claims processing claim for appellate review.¹ See Unified Contractor, Inc. v. Albuquerque Hous. Auth., 2017-NMCA-060, ¶ 34, 400 P.3d 290 (concluding that a party can preserve a substantial evidence issue for appellate review by requesting findings and conclusions or otherwise calling the lower court's attention to the error and, even in the absence of either, this Court may still review the lower "court's decision to determine whether it is legally correct, and whether it is supported by findings of fact, if any, made by the [lower] court." (alteration, internal quotation marks, and citation omitted)).

B. The WCJ Did Not Err in Determining There Was No Unfair Claims Processing

{9} Worker argues that the WCJ erred in determining there was no unfair claims processing in this case.² "All workers' compensation cases are reviewed under a whole record standard of review[,]" Moya v. City of Albuquerque, 2008-NMSC-004, ¶ 6, 143 N.M. 258, 175 P.3d 926, to "determine if there is substantial evidence to support the result[,]" Leonard v. Payday Prof'l, 2007-NMCA-128, ¶ 10, 142 N.M. 605, 168 P.3d 177 (internal quotation marks and citation omitted). "We view the evidence in the light most favorable to the decision[.]" Dewitt v. Rent-A-Ctr., Inc., 2009-NMSC-032, ¶ 12, 146 N.M. 453, 212 P.3d 341. "We defer to the fact finder's resolution of conflicts in the evidence and indulge all inferences in favor of the findings." Rodriguez v. McAnally Enters., 1994-NMCA-025, ¶ 11, 117 N.M. 250, 871 P.2d 14; see also Romero v. Laidlaw Transit Servs., Inc., 2015-NMCA-107, ¶ 8, 357 P.3d 463 ("We give deference to the WCJ as fact finder where findings are supported by substantial evidence."). Our appellate courts 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. We also applya de novo standard of review to the extent our analysis involves the interpretation of the Act and its associated regulations. Romero, 2015-NMCA-107, ¶ 8; Howell v. Marto Elec., 2006-NMCA-154, ¶ 16, 140 N.M. 737, 148 P.3d 823.

{10} The party bringing a claim of unfair claims processing has the burden of proving such a claim. Cf. Sosa v. Empire Roofing Co., 1990-NMCA-097, ¶ 8, 110 N.M. 614, 798 P.2d 215 (holding that the worker—in workers' compensation context—had the burden of proof to establish bad faith on the part of employer and insurer); Munoz v. Deming Truck Terminal, 1990-NMCA-084, ¶ 18, 110 N.M. 537, 797 P.2d 987 (holding that "a party seeking relief based upon disputed factual matters has the burden of proof of presenting sufficient evidence to support such contentions"); Wallace v. Wanek, 1970-NMCA-049, ¶ 9, 81 N.M. 478, 468 P.2d 879 ("He who alleges the affirmative must prove."). In this case,...