Montney v. State ex rel. State Highway Dept., Risk Management Div. for State of N.M.

• Decision Date: 10 January 1989
• Docket Number: No. 10628,10628
• Citation: Montney v. State ex rel. State Highway Dept., Risk Management Div. for State of N.M., 772 P.2d 360, 108 N.M. 326, 1989 NMCA 2 (N.M. App. 1989)
• Parties: Paul MONTNEY, Plaintiff-Appellant, Cross-Appellee, v. STATE of New Mexico, ex rel. STATE HIGHWAY DEPARTMENT, RISK MANAGEMENT DIVISION for the STATE of NEW MEXICO, Defendants-Appellees, Cross-Appellants.
• Court: Court of Appeals of New Mexico

Page 360

772 P.2d 360

108 N.M. 326

Paul MONTNEY, Plaintiff-Appellant, Cross-Appellee, v. STATE of New Mexico, ex rel. STATE HIGHWAY DEPARTMENT, RISK MANAGEMENT DIVISION for the STATE of NEW MEXICO Defendants-Appellees, Cross-Appellants.

No. 10628.

Court of Appeals of New Mexico.

Jan. 10, 1989.

Certiorari Denied Feb. 15, 1989.

[108 NM 327] Frederick H. Sherman, Sherman and Sherman, P.C., Deming, for plaintiff-appellant, cross-appellee.

Wendell B. Lane, Campbell, Reeves, Chavez & Acosta, P.A., Las Cruces, for defendants-appellees, cross-appellants.

OPINION

DONNELLY, Chief Judge.

Both the plaintiff and the State Highway Department, a self-insured through the Risk Management Division (state), pursue separate appeals from the trial court's judgment in this workers' compensation action. Plaintiff raises four issues on appeal: (1) whether the Public Employees' Retirement Board (PERA Board) is an indispensable or necessary party; (2) whether the trial court erred in ruling that workers' compensation benefits awarded to plaintiff may be offset by benefits paid to him under the State Public Employees Retirement Act; (3) whether equity bars allowance of a credit for PERA benefits; and (4) whether the trial court erred in denying an award of prejudgment interest. The state contends in its cross-appeal that (1) the court erred in determining that the exclusivity provisions of the Workers' Compensation Act did not prohibit plaintiff from receiving both workers' compensation benefits and PERA disability retirement benefits and (2) the court erred in ordering the state to furnish reasonable and necessary medical and psychological services to plaintiff. We affirm in part and reverse in part.

Plaintiff was employed as a mechanic and equipment operator. He sustained an on-the-job injury on September 20, 1985, when he jumped from a dump truck and severely injured his left knee. The injury to the left knee also placed additional stress on the right knee, causing pain. As a result of his injury plaintiff has undergone four separate knee operations. Plaintiff alleged that his injury has restricted his ability to walk, that the injury has caused pain and precipitated an ulcer, and that both the injury and resulting pain have concomitantly caused severe anxiety and depression.

After trial on the merits the court adopted findings that the plaintiff is suffering from physical pain and depression, that he is presently temporarily totally disabled "due to a combination of his physical and psychological conditions," and that plaintiff is in need of psychiatric treatment and vocational rehabilitation services. The court also found that, as a result of his injury, plaintiff applied for and received a "duty disability retirement" from PERA entitling him to receive $450.07 gross monthly benefits from PERA for the remainder of his life unless, upon subsequent review, he is determined to be no longer disabled.

Based on its findings the court concluded that plaintiff was entitled to workers' compensation benefits in the amount of $208.60 per week for 600 weeks, that the duty disability retirement benefits provided under PERA and the workers' compensation benefits were of the same general character, and that the state is entitled to receive a credit of $450.07 per month for each month plaintiff "has received and will receive PERA disability retirement benefits."

I. PLAINTIFF'S APPEAL

(A) Issue as to Joinder

Plaintiff contends that the PERA Board is an indispensable or necessary party in order for the trial court to determine whether the state is entitled to a deduction from or credit against workers' compensation benefits for PERA disability retirement benefits.

The judgment of the trial court, in addition to directing that the state receive a credit of $450.07 per month for each month plaintiff has received or will receive PERA disability benefits, also provided that the award to plaintiff "before applying credits for workers' compensation benefits and PERA benefits, totals $125,160.00 [and that a] credit of $12,768.36 is granted for workers' compensation benefits [plaintiff] has received * * *. A credit of $59,962.09 is granted for PERA Disability Retirement Benefits [he] has received and will receive during the remainder of his 600-week award."

Under SCRA 1986, 1-019, a party is required to be joined in an action (1) if in his absence complete relief cannot be accorded among those who are already parties or (2) if he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may, as a practical matter, impair or impede his ability to protect that interest or leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest.

Under the pleadings and the posture of this case, we determine that joinder of the PERA Board was permissive, not mandatory. The PERA Board computed and voluntarily authorized the payment of disability benefits to claimant under its act, and the trial court neither directed nor ordered the PERA Board to refrain from or take any action, nor did the court interpret or construe the PERA Act. Instead, the court's inquiry turned on an interpretation of the Workers' Compensation Act. Thus the board was not an indispensable or necessary party.

(B) Offset for PERA Benefits

We jointly discuss plaintiff's second and third issues raised on appeal. Plaintiff argues that the district court erred in determining that the PERA and workers' compensation benefits received by him are of the same general character, thereby requiring the grant of a credit or offset. Prior to trial the state moved to dismiss plaintiff's workers' compensation claim, contending that the Workers' Compensation Act prevents a worker from recovering both compensation and other statutory benefits provided by the same employer and arising from the same accidental injury. The trial court denied the motion but granted a credit against workers' compensation benefits for the amount of PERA benefits received by plaintiff. We agree with plaintiff that a credit or offset was not appropriate, absent a specific statutory provision for such credit or offset.

Other than excepting an award of compensation benefits made under the laws of another jurisdiction, the Workers' Compensation Act in effect at the time of plaintiff's disability was silent concerning the right of an employer to claim an offset or credit for other disability benefits furnished by the employer arising from the same injury and resulting disability. See NMSA 1978, Sec. 52-1-65 (Repl.Pamp.1987).

In Carter v. Mountain Bell, 105 N.M. 17, 727 P.2d 956 (Ct.App.1986), this court, pursuant to the doctrine of fundamental fairness recognized in Paternoster v. La Cuesta Cabinets, Inc., 101 N.M. 773, 689 P.2d 289 (Ct.App.1984), held that although the Workers' Compensation Act did not expressly allow credit against payments under employer benefit plans for workers' compensation benefits, that fact did not preclude allowance of credits, since benefits were in the nature of a contract and claimant's rights should be equally governed by them. In that case the private benefit plan precluded claimant from receiving both workers' compensation and the benefits under the plan. Such is not the case here. Thus, Carter is not controlling under the facts of this case. The holding in Carter is a limited one which recognized a right of credit against workers' compensation benefits "primarily based on the language of the plan itself." 105 N.M. at 23, 727 P.2d at 962. In the case before us, there is no requirement under either the Workers' Compensation Act or the PERA disability retirement plan for offsets or credits.

In Mendez v. Southwest Community Health Services, 104 N.M. 608, 725 P.2d 584 (Ct.App.1986), this court considered an issue analogous to the present case. The trial court in that case awarded workers' compensation benefits based on the scheduled injury section. The plaintiff in Mendez also received payment of unemployment compensation benefits resulting from his inability to work because of injuries resulting from the same accident. On appeal the employer argued that as a matter of law plaintiff's receipt of unemployment compensation benefits barred her right to receive workers' compensation benefits for total disability. Relying on Winter v. Roberson Construction Co., 70 N.M. 187, 372 P.2d 381 (1962), the Mendez court rejected this contention, noting that the states which have precluded double recovery in such a situation have done so by statute and that the New Mexico legislature had not specifically adopted similar limiting legislation. ¹

In Carter we noted the difficulty of dealing with this issue because cases from other jurisdictions are, for the most part, based on specific statutes. As stated earlier, there is no statutory requirement directing offsets or credits under either the Workers' Compensation Act or the PERA disability plan. Thus cases relied on by the state, such as Johnson v. City of Muskegon, 61 Mich.App. 121, 232 N.W.2d 325 (1975), are distinguishable.

In the absence of statutory provisions designed to avoid double payments, some courts, as noted in Carter, 105 N.M. at 31, 727 P.2d 956, have dealt with the issue by looking at the underlying philosophy of the Workers' Compensation Act. For example, in D.C. Transit System, Inc. v. Massey, 260 F.Supp. 310, 312 (D.D.C.1966), the court said:

It follows hence that to allow Workmen's Compensation over and above [a] pension, in effect, constitutes double payment. The situation would be entirely different if the workman received an income from an outside, unrelated source, whether by way of insurance maintained by himself or as gift or gratuity from someone.

This doctrine is developed and approved in the leading treatise on this subject, Larson's Workmen's...