Ruiz v. City of Albuquerque

• Citation: 1978 NMCA 15,577 P.2d 424,91 N.M. 526
• Decision Date: 31 January 1978
• Docket Number: No. 2986,2986
• Parties: Timothy A. RUIZ, Plaintiff-Appellant, v. CITY OF ALBUQUERQUE, a Municipal Corporation, Defendant-Appellee.
• Court: Court of Appeals of New Mexico

Page 424

577 P.2d 424

91 N.M. 526

Timothy A. RUIZ, Plaintiff-Appellant, v. CITY OF ALBUQUERQUE, a Municipal Corporation, Defendant-Appellee.

No. 2986.

Court of Appeals of New Mexico.

Jan. 31, 1978.

Rehearing Denied Feb. 13, 1978.

Writ of Certiorari Denied March 13, 1978.

[91 N.M. 528] Charlotte Mary Toulouse, Toulouse, Krehbiel & DeLayo, P. A., Albuquerque, for plaintiff-appellant.

William J. Tryon, Asst. City Atty., Albuquerque, for defendant-appellee.

OPINION

SUTIN, Judge.

Originally, this was an amicable proceeding between plaintiff, Ruiz, and defendant, City, for settlement of a workmen's compensation claim.

A Complaint, Answer, Stipulation for Judgment, Judgment, and Satisfaction of Judgment were filed on June 21, 1976, in the clerk's office of the District Court in Bernalillo County. The City prepared the forms which both Ruiz, and an attorney furnished Ruiz by the City, signed.

On February 10, 1977, Ruiz, by present counsel, filed a motion to set aside the judgment or in the alternative to amend the judgment. Ruiz sought an order requiring the City to pay Ruiz the $1,000.00 vocational rehabilitation benefits to which he was entitled pursuant to § 59-10-19.2, N.M.S.A. 1953 (2d Repl. Vol. 9, pt. 1) of the Workmen's Compensation Act and to pay additional attorney fees. A hearing was held on March 23, 1977 at 4 p. m. The evidence was scanty. On March 24, 1977, the trial court wrote the parties that based upon two cases submitted by the City, the motion was denied. On April 7, 1977, an order was entered that denied Ruiz' motion. Ruiz appeals. We reverse.

To resolve this issue, we shall delineate the meaning of the initial judgment and satisfaction thereof, the Ruiz motion filed for vocational rehabilitation, and the evidence introduced at the hearing on the motion. It is a matter of first impression. The briefs filed by both attorneys are of no assistance and merit no consideration.

A. The initial judgment was erroneous on Ruiz' release of claims against the City.

Ruiz was employed by the City as a maintenance man at the Rio Grande Zoo. He was assigned as Grade 4, step 5, Physical Class 1. On July 3, 1975, Ruiz suffered an injury to the left knee cap, and as a result thereof, he was assigned to Class 3, and continued to work until sometime after the settlement was made on June 21, 1976.

The testimony does not disclose whether Ruiz or the City sought a settlement of the claim. Ruiz testified that he asked the claim's officer several times to advise him of the claim's procedure, and whether he should get a lawyer. The claim's officer's repeated response was: "We'll take care of it." There is conflicting testimony as to whether or not Ruiz requested the City to hire an attorney for him.

Nevertheless, the claim's officer selected an attorney for Ruiz, asked the attorney to represent Ruiz, and arranged for them to meet for the first time at the settlement meeting in the office of the claim's officer. Ruiz testified that upon meeting the attorney, he accepted the claim's officer's choice and felt that he could trust him as his counsel. Prior to the signing of the papers, Ruiz never met alone with his attorney. All discussion concerning the settlement was done in the presence of both parties and both attorneys.

After the forms were prepared and signed, Ruiz and his attorney walked to the courthouse. On the way, Ruiz asked his attorney if he handled these cases regularly. The attorney answered that he did handle claims of this sort but had never done one for the City. Plaintiff asked the attorney if this matter was on the level. The attorney thought for a moment and then said: "I don't see anything missing." Ruiz was told that once this matter was settled, there would be no further litigation. After leaving the judge's chambers, plaintiff was handed a draft in payment of the settlement, less $100.00 for attorney fees.

The Stipulation for Judgment provided That upon the filing of the Satisfaction of Judgment, all claims by the plaintiff against the defendant . . . as described in the complaint herein, shall be fully and finally released, discharged and satisfied, except that the medical provision will remain open until June 14, 1976. (Emphasis added.)

The Judgment provided:

That upon the signing of a Satisfaction of Judgment, the defendant shall be fully and finally released and discharged for any and all claims by the plaintiff on account of the plaintiff's alleged accident or injury on or about July 3, 1975, while working for the defendant in the Rio Grande Zoo. (Emphasis added.)

A conflict exists between the language used in the Stipulation for Judgment and the Judgment itself on the release executed by Ruiz. The stipulation releases only the claims "described in the complaint." It did not release plaintiff's additional claim for vocational rehabilitation. The judgment released "any and all claims by the plaintiff." It did not carry forward the language contained in the stipulation, a stipulation signed by Ruiz, by his attorney selected by the City, and by the City's attorney. It was the intention of the parties that the stipulation would release only the claims "described in the complaint."

This settlement procedure is governed by the Workmen's Compensation Act. The judgment was a lump-sum settlement. Section 59-10-25(B) allows the district court, at all times, to approve any settlement for a lump sum. Section 59-10-13.8 provides in pertinent part:

. . . (T)he court, if it approves such settlement, shall order a judgment of record to be entered in accordance with the settlement, carrying the settlement into effect . . . . The judgment shall be satisfied of record if it is shown by the instrument or instruments filed that payment has already been made in full. (Emphasis added.)

The judgment entered of record was not in accordance with the settlement entered into. It provided that Ruiz released and discharged the City "for any and all claims" arising out of the accident. That portion of the judgment is void.

Furthermore, the complaint on the City's form consisted of two sentences: (1) the time and place of the injury suffered by plaintiff, and (2) the weekly earnings, disability and medical expenses caused by the injury. Compensation for disability and medical expenses were the only claims made by the plaintiff and the only claims released, discharged and satisfied.

Neither of the parties presented to this Court the rules governing the construction of the language used in a release nor authorities that created the rules of construction.

Dinkle v. Denton, 68 N.M. 108, 112, 359 P.2d 345, 347 (1961) quoted the following with approval:

" * * * the primary rule of construction of releases is that the intention of the parties must govern . . . . This intention must be gathered from the words used in the instrument and not from matters dehors the writing. In accordance with these principles, it has been held that words in a release should not be construed to extend beyond the express consideration mentioned, and that such words should not be construed to operate as a release of indebtedness which the parties apparently did not intend * * * ." (Emphasis added.)

Dinkle, supra; Moruzzi v. Federal Life & Casualty Co., 42 N.M. 35, 75 P.2d 320 (1938) and Buel v. Kansas City Life Insurance Co., 32 N.M. 34, 250 P. 635, 52 A.L.R. 367 (1926) stand for the proposition that the payment of a liquidated, undisputed, matured obligation does not furnish a consideration for the release of any additional obligation.

Buel said:

No doubt it would be convenient to tighten the rule as to settlements; thus avoiding considerable litigation. It should not be overlooked, however, that the rule objected to does not affect any case of real settlement mutual concession; and that, if we were to follow the so-called 'tendency,' we should smother under a rule of convenience many meritorious causes of action. (32 N.M. at 42-43, 250 P. at 638.)

New Mexico looks with disfavor on releases that smother a meritorious claim for relief. In personal injury cases, this policy was expressly adopted by the enactment of the "Release Act." Section 21-11-1, et seq., N.M.S.A. 1953 (Repl. Vol. 4, 1975 Supp.). See Mitschelen v. State Farm Mut. Auto Ins. Co., 89 N.M. 586, 555 P.2d 707 (Ct.App.1976). Under the Compensation Act, to fulfill its purposes, we believe that any reasonable doubt as to the intentions of the parties and the effect of a release should be construed in favor of the workman.

Jordan v. Guerra, 23 Cal.2d 469, 144 P.2d 349 (1943) lays to rest the City's position. The plaintiff accepted $150.00 in settlement of a claim for the death of his son. He was led to believe that he had no claim except for the items of funeral expense and time lost, and executed a release of all liability resulting from the accident. Plaintiff sued for damages for the wrongful death of his son. On the subject of the release as a defense, plaintiff testified that he understood the settlement was final and he was satisfied with it but he did not know that he had a right to anything except the items of funeral expenses and time lost. The court said:

. . . (S)uch a release because of the deception practiced upon the claimant must be construed as a settlement of those matters only as to which the minds of the parties met, and may not be considered to be in satisfaction of anything not consented to by the plaintiff. (144 P.2d at 352.)

The release in the instant case reflected the intention of the parties. The City prepared the forms, furnished plaintiff an attorney, and then hauled him before the district judge to have the district judge sign the judgment. At this time, vocational rehabilitation was not ripe for settlement, nor was it discussed or considered by the parties or the district judge.

Ruiz and the City intended to satisfy, discharge and release the City from compensation payments and medical payments incurred at the time of the accident....