Paradiso v. TIPPS EQUIPMENT

• Decision Date: 20 November 2003
• Docket Number: No. 23,562.,23,562.
• Citation: 2004 NMCA 9,134 N.M. 814,82 P.3d 985
• Court: Court of Appeals of New Mexico
• Parties: In the Matter of Domenic J. PARADISO, deceased worker, and Robert and Frances Doak, as parents and guardians of Nicholas and Joshua Paradiso, minors, Worker-Appellees, v. TIPPS EQUIPMENT and Food Industry Self-Insurance Fund, Employer/Insurer-Appellants.

82 P.3d 985

134 N.M. 814

2004 NMCA 9

In the Matter of Domenic J. PARADISO, deceased worker, and Robert and Frances Doak, as parents and guardians of Nicholas and Joshua Paradiso, minors, Worker-Appellees, v. TIPPS EQUIPMENT and Food Industry Self-Insurance Fund, Employer/Insurer-Appellants.

No. 23,562.

Court of Appeals of New Mexico.

November 20, 2003.

Certiorari Denied January 8, 2004.

David Duhigg, John J. Duhigg, Duhigg, Cronin, Spring, Berlin & Bencoe, P.A., Albuquerque, NM, for Appellees.

Paul L. Civerolo, Sturges & Houston, P.C., Albuquerque, NM, for Appellants.

Certiorari Denied, No. 28,411, January 8, 2004.

OPINION

SUTIN, Judge.

{1} Tipps Equipment (Employer) and Food Industry Self-Insurance Fund (Insurer) appeal adverse decisions of a Workers' Compensation Judge (WCJ) denying enforcement of a settlement agreement and granting summary judgment awarding compensation based on findings of fact entered in a parallel district court action in which the court determined it had jurisdiction to award reimbursement to Insurer and thereafter ordered reimbursement. We affirm.

BACKGROUND

{2} Domenic Paradiso (the decedent) was killed in 1997 while employed by Employer, leaving two minor children (Children) born in 1995 and 1996. Two actions ensued, one, a wrongful death action in district court, and the other, a proceeding in the Workers' Compensation Administration (WCA) under the Workers' Compensation Act, NMSA 1978, §§ 52-1-1 to -70 (1929, as amended through 2003) (the Act), and the Workers' Compensation Administration Act, NMSA 1978, §§ 52-5-1 to -21 (1986, as amended through 2003) (the WCA Act). We will refer to Employer and Insurer together as Insurer, because their interests are the same.

{3} The personal representative of the decedent's estate, Frances Doak, and Children, through their parent (mother) and next friend, Antoinette Romero, filed a wrongful death action against a cattle rancher and the New Mexico State Highway and Transportation Department. In October 1999, anticipating a lump sum settlement in the action, Children interpled Insurer based on Insurer's reimbursement right under the WCA Act. At the time of the interpleader, Insurer had paid the decedent's medical and funeral expenses and had been paying workers' compensation benefits to Children. The court permitted the plaintiffs to interplead Insurer "for the limited purpose of determining the reimbursement right of [Insurer]."

{4} An attorney was appointed both Children's Guardian Ad Litem to advise the court and Children's Conservator. This attorney's law firm (the law firm) represented Conservator and Guardian. Another attorney was appointed Guardian of Children to receive and manage all monetary benefits arising out of the death of the decedent for the benefit of Children and to meet with the mother of Children on a regular basis to develop a plan for the spending of Children's benefits.

{5} In December 1999, the plaintiffs and the defendants settled the claims in the district court action. The court approved the settlement and a stipulated order was entered in March 2000 dismissing the wrongful death action based on the settlement. The issue of Insurer reimbursement remained before the district court.

{6} In their interpleader complaint to determine Insurer's reimbursement right, the plaintiffs alleged that Insurer had paid 136.25 weeks of indemnity benefits. The plaintiffs asserted that the total indemnity benefits payable would be for 700 weeks at $363.60 per week, totaling $254,520, and that the potential reimbursement claim of Insurer could be the $254,520 amount, plus medical and funeral benefits already paid. Insurer responded by alleging that 146.25 weeks had been paid and alleging its entitlement to full reimbursement for those weeks of paid compensation, and admitting that if the estate or Children were entitled to 700 weeks, the total compensation would be $254,520, but that "this is subject to application of New Mexico cases and authorities."

{7} Insurer asserted, however, that the district court lacked subject matter jurisdiction because the WCA had exclusive subject matter jurisdiction to determine the amount of reimbursement due from a third party settlement under Section 52-5-17. Children countered that the court had jurisdiction to decide the reimbursement issue.

{8} In August 2000, while the reimbursement issue was pending in district court, Insurer filed a workers' compensation complaint in the WCA for calculation and protection of its "full statutory right of reimbursement." Insurer claimed that under Montoya v. AKAL Security, Inc., 114 N.M. 354, 358, 838 P.2d 971, 975 (1992), Children had been made whole by the third party settlement in the wrongful death action but that, in the district court proceedings, the parties had not settled the question of right to reimbursement. Insurer sought WCA adjudication of the issue. Children, through Guardian, sought a dismissal of Insurer's WCA complaint on the ground that the district court, having concurrent jurisdiction and having first acquired jurisdiction, "retains jurisdiction."

{9} In the WCA proceeding, the law firm represented "Worker," who was described in the caption as "In the Matter of Domenic J. Paradiso, deceased, and Antoinette Romero as parent and natural guardian of Nicholas and Joshua Paradiso, minors," hereafter, referred to as Children. The law firm also represented both Guardian and Conservator for Children.

{10} In October 2000, a WCA mediator recommended that Insurer had "a dollar for dollar reimbursement right under relevant case law." On behalf of "Worker," the law firm refused to participate in the mediation process. By special appearance, Children asserted that the WCA had no jurisdiction and Children also rejected the recommended resolution. In November 2000, the district court entered an order determining that it and the WCA "would have jurisdiction to hear the issues presented," and that the court was "the proper forum for hearing on the merits," and was "a proper forum for disposition of the [reimbursement] claims." In December 2000, a WCJ stayed the WCA action pending the district court's determination of the issues before the court.

{11} Following an evidentiary hearing, the district court entered findings of fact in June 2001 relating to both the wrongful death settlement and the reimbursement issue. Based on several supporting findings, the district court found that the settlement amount of $630,000 was fair and reasonable. Based on several other supporting findings, the court concluded that Insurer was entitled to reimbursement by Conservator in the amount of $50,063.

{12} Children sought entry of an order reflecting that Insurer owed the balance due on its 700-week benefits obligation. Rejecting that proposed order because the 700-week benefits issue "wasn't litigated," because the WCA had exclusive jurisdiction "to determine how much the remaining amounts are owed," and because Children were not foreclosed from pursuing that determination in the WCA, the court entered an order on August 9, 2001, stating:

1. Pursuant to the Court's Findings of Fact and Conclusions of Law, the Conservator... shall pay reimbursement to the [Insurer] in the amount of $50,063.00.

....

3. The sole issue before the Court was the amount of reimbursement under § 52-5-17 to be paid by the Conservator to [Insurer] for benefits from the Third Party death settlement. No finding or conclusion entered herein shall affect the rights of any party on other issues pertaining to Workers' Compensation benefits.

This order ended the district court action and no party appealed from that order.

{13} The parties moved back over to the pending WCA proceeding. Children filed a motion in August 2001 asking the WCJ to take judicial notice of and accept the findings of fact of the district court. Children asserted that the district court had jurisdiction to determine the question of reimbursement and that the court applied "the Gutierrez formula" in determining that question. See Gutierrez v. City of Albuquerque, 1998-NMSC-027, 125 N.M. 643, 964 P.2d 807

(creating a formula for determining an equitable WCA allocation of third party recovery settlement proceeds). The crux of this motion was that the court's employment of the Gutierrez formula, together with the court's entry of findings of fact, including its findings that under the Act "benefits are payable for a total of 700 weeks," and that Insurer's "obligation was for the payment of lost wages in the amount of $254,520.00 as Workers' Compensation benefits," amounted to an adjudication of the issue of Children's right to further compensation benefits.

{14} Insurer responded in November 2001 that the issue of whether the court adjudicated Children's right to further compensation had already been raised by Children in the district court, after the court entered its findings, and that the court stated that the issue had not been litigated. Insurer emphasized that "the sole issue for disposition before the District Court was the issue of [Insurer's] reimbursement right," and that the court "clarified its ruling that the sole issue tried ... was the issue of reimbursement only." In addition, Insurer asserted that the WCJ's exclusive jurisdiction of the issue required the WCJ to determine the issues in an evidentiary hearing.

{15} In a settlement conference on October 2, 2001, before a WCJ acting as mediator, the parties orally agreed to a settlement of the issue of Insurer's obligation for future benefits. Conservator was present. Another attorney from the same law firm, acting as attorney for Guardian and Conservator, placed the agreement on the record. The parties agreed that the $50,063 check tendered to Insurer pursuant to the district court reimbursement order would be returned to Children and Children would also receive an additional $45,000, totaling $95,063. The issue of attorney fees was left for later...