Peterson v. WELLS FARGO ARMORED SERVICES, 19,644.

• Decision Date: 20 March 2000
• Docket Number: No. 19,644.,19,644.
• Citation: 129 N.M. 158,3 P.3d 135
• Parties: Jean A. PETERSON as Personal Representative of the Estate of Jeffrey Oelcher, Plaintiff-Appellant, v. WELLS FARGO ARMORED SERVICES CORP., Defendant-Appellee.
• Court: Court of Appeals of New Mexico

3 P.3d 135

129 N.M. 158

Jean A. PETERSON as Personal Representative of the Estate of Jeffrey Oelcher, Plaintiff-Appellant, v. WELLS FARGO ARMORED SERVICES CORP., Defendant-Appellee.

No. 19,644.

Court of Appeals of New Mexico.

March 20, 2000.

Certiorari Denied May 9, 2000.

Hazen H. Hammel, Cates & Hammel, P.C., Los Lunas, Mark M. Rhodes, Rhodes & Salmon, P.C., Albuquerque, for Appellant.

J.E. Casados, Gallagher, Casados & Mann, P.C., Albuquerque, for Appellee.

Certiorari Denied, No. 26,282, May 9, 2000.

OPINION

WECHSLER, Judge.

{1} Jean Peterson (Plaintiff), personal representative of the estate of Jeffrey Oelcher, appeals from the trial court's order granting summary judgment in favor of Defendant Wells Fargo Armored Service Corporation (Wells Fargo). In essence, the order determines that Wells Fargo complied with the insurance provisions of the Workers' Compensation Act and therefore workers' compensation is the exclusive remedy for the death of Jeffrey Oelcher, Plaintiff's son. See NMSA 1978, §§ 52-1-6(C) & (D) (1990) (effective January 1, 1992), 52-1-8 (1989), 52-1-9 (1973); Harger v. Structural Servs., Inc., 121 N.M. 657, 666, 916 P.2d 1324, 1333 (1996). We conclude that Wells Fargo did not substantially comply with the filing provisions of the Act and that summary judgment is inappropriate and therefore reverse and remand.

Facts and Procedural Posture

{2} The following facts are assumed for purposes of summary judgment; they may still be subject to some dispute in the trial court. On August 25, 1994, Wells Fargo employed Jeffrey Oelcher as a driver-guard. On that day, Oelcher and a partner had been assigned a Budget Rentals van to use in their route from Albuquerque to Socorro, Gallup, and Grants and back to Albuquerque. Two men in a pickup truck ambushed the van on a back road. One of the men, who was lying in the bed of the pickup, fired a gun at the van. The bullet went through the windshield, which was not armored or in any other way reinforced, and struck Oelcher in the head. Oelcher died either immediately or a very short time after being shot.

{3} Oelcher was survived by his mother, Plaintiff; his stepfather, Ken Peterson; his fiancé, April Dunton; and his two minor children born to April Dunton. On August 30, 1994, Ken Peterson called the Workers' Compensation Administration (the Administration) and asked whether Wells Fargo or Borg-Warner, its parent company, had workers' compensation insurance. He was told that the Administration's records did not show that either company had workers' compensation insurance. The next day, Sandy Offerdahl of Travelers Insurance (Travelers), wrote Dunton. The letter told Dunton that Travelers was the workers' compensation carrier for Wells Fargo and asked Dunton to contact Offerdahl. During September 1994, Offerdahl and Dunton spoke by telephone several times. Offerdahl indicated that she wanted copies of the birth certificates of the children so that she could begin processing workers' compensation benefits. Ultimately, on September 15, 1994, Dunton told Offerdahl that she wanted to appeal the amount of the benefits, that she was represented by an attorney, and that Plaintiff had advised her not to send Offerdahl copies of the birth certificates. On September 20, 1994, Offerdahl sent the attorney a letter identifying Travelers as the workers' compensation carrier and asking for birth certificates. The attorney never responded.

{4} In February 1995, Plaintiff, as personal representative of her son's estate, filed a complaint and then an amended complaint in district court seeking damages for wrongful death. As to Wells Fargo, the complaint alleged that the "Big Red" armored cars used by Wells Fargo had frequent mechanical difficulties and, as a result, Wells Fargo had used ordinary rental vans from Budget on some of its routes, including the route Oelcher was on at the time of his death.

{5} On August 1, 1995, the trial court ordered Wells Fargo to produce evidence, before September 13, 1995, of its compliance with the insurance provisions of the Act. Thereafter, Wells Fargo's attorney allowed Plaintiff's attorneys to inspect the copy of the policy that he had. Two years later, at the hearing on the motion for summary judgment, Wells Fargo's attorney informed the trial court that at the time Plaintiff's attorneys looked at the policy, the terms and conditions of the policy were not available.

{6} Also in September 1995, Plaintiff's attorneys contacted the Administration to determine if a notice of accident report, referred to as an E-1, had been filed. On September 22, 1995, Alex Maestas, then Records Manager for the Administration, searched the computer data base and the archives and told the attorneys that no such report had been filed. Maestas executed an affidavit on that date to that effect. Two years later, Maestas did the same search and found an E-1 for the incident. Maestas could not explain why he had been unable to find the report two years earlier. Although the statute requires that a copy of the E-1 be served on the worker, see NMSA 1978, § 52-1-58(A) (1990), it is undisputed that no service had been made.

{7} On September 15, 1995, Plaintiff filed a motion for leave to amend her complaint to add a claim of negligence against Wells Fargo. The motion indicated that Wells Fargo had failed to produce evidence that it had complied with the insurance provisions of the Act and that it still had not filed proof of coverage as required by the Act. Plaintiff attached a second amended complaint to the motion. In addition to the allegations previously made concerning the failure to keep the Big Red armored vans in good repair, the second amended complaint specifically alleged that Wells Fargo had failed to comply with the provisions of the Act concerning insurance and therefore Plaintiff was entitled to sue Wells Fargo for its alleged negligence.

{8} On November 15, 1995, Wells Fargo filed proof of insurance coverage for calendar year 1994 with the Administration. On November 29, 1995, the trial court granted the motion to amend the complaint. The second amended complaint was formally filed on December 5, 1995.

{9} Almost two years later, in September 1997, Wells Fargo filed a motion for summary judgment. Plaintiff filed a response. The trial court held argument on the motion on May 1, 1998. On July 17, 1998, the trial court filed an order granting summary judgment in favor of Wells Fargo. This appeal followed.

Applicable Statutory Provisions

{10} The Workers' Compensation Act (the Act) is, by statute, the exclusive remedy for on-the-job injuries or deaths. However, in order to take advantage of the exclusive remedy provisions of the Act, an employer must comply with the provisions of the Act concerning insurance. See §§ 52-1-6(C) & (D); 52-1-8; 52-1-9. If the employer fails to comply with those provisions, the worker can sue the employer either for compensation benefits or for damages in tort caused by the employer's negligence. See Harger, 121 N.M. at 666, 916 P.2d at 1333. The worker has the choice of remedy.

{11} The provisions of the Act concerning insurance are relatively straightforward. Employers are given a choice. They may either qualify as self-insured pursuant to the provisions of the Act and the regulations of the Administration, or they may purchase insurance to cover their potential liability under the Act. See § 52-1-4; 11 NMAC 4.8.8 (1996); In re Mission Ins. Co., 112 N.M. 433, 435, 816 P.2d 502, 504 (1991); Addison v. Tessier, 62 N.M. 120, 125, 305 P.2d 1067, 1069-70 (1957). The standards for allowing employers to self-insure their liability are relatively high, requiring, among other things, a tangible net worth in excess of $2.5 million, at least three years in business, a risk management program, and a workers' compensation specific occurrence or aggregate insurance with retention of $250,000 and statutory upper limits. See 11 NMAC 4.8.8.1.

{12} If the employer chooses to obtain insurance, the insurance policy must make the insurer directly and primarily liable to the injured worker or his dependents. See § 52-1-4. All states require that the compensation liability be insured, either through private insurance, self-insurance, or insurance provided by state funds. See 9 Arthur Larson & Lex K. Larson, Larson's Workers' Compensation Law § 92.11, at 17-1 to 17-5 (1999). The rationale is straightforward: to make sure that injured workers or their dependents will be able to collect the benefits due to them even if the employer goes out of business or becomes bankrupt. See id. § 92.12. In addition, the Act requires the employer to file proof of insurance coverage with the director of the Administration. See § 52-1-4(A); 11 NMAC 4.11.8 (1996).

Filling of Proof of Coverage

{13} Plaintiff contends that summary judgment was improper because there are disputed issues of fact concerning whether Wells Fargo substantially complied with the statutory requirement that it file proof of insurance coverage with the Administration. See § 52-1-4; 11 NMAC 4.11.8; see also Roth v. Thompson, 113 N.M. 331, 334-35, 825 P.2d 1241, 1243-44 (1992) (explaining that summary judgment is improper if there are disputed issues of material fact). In the trial court and on appeal, Wells Fargo offered three arguments on this issue. First, it argued that it complied with the statute by filing proof of coverage with the National Counsel for Compensation Insurance (NCCI.). Second, it argued that by filing proof of coverage in November 1995, it substantially complied with the statute. Third, it argued that the date that it complied with the filing requirements does not matter because Plaintiff was on notice that benefits were available. For the following reasons, we conclude that summary judgment was inappropriate. See Rummel v. Lexington Ins. Co., 1997-NMSC-041, ¶¶ 16-17, 123 N.M. 752, 945 P.2d 970 (recognizing that summary judgment is inappropriate if ...