Security Ins. Co. of Hartford v. Chapman

• Decision Date: 10 September 1975
• Docket Number: No. 10029,10029
• Citation: 540 P.2d 222,1975 NMSC 52,88 N.M. 292
• Parties: SECURITY INSURANCE COMPANY OF HARTFORD, Plaintiff-Appellant, v. Fred L. CHAPMAN, Earline B. Chapman, Presbyterian Hospital Center, Edwin B. Herring, M.D. and George A. Atkinson, M.D., Defendants-Appellees.
• Court: New Mexico Supreme Court

Page 222

540 P.2d 222

88 N.M. 292

SECURITY INSURANCE COMPANY OF HARTFORD Plaintiff-Appellant, v. Fred L. CHAPMAN, Earline B. Chapman, Presbyterian Hospital Center, Edwin B. Herring, M.D. and George A Atkinson, M.D., Defendants-Appellees.

No. 10029.

Supreme Court of New Mexico.

Sept. 10, 1975.

[88 NM 294] Toulouse, Krehbiel & Cheney, James R. Toulouse, J. K. Winchester, Albuquerque, for plaintiff-appellant.

Modrall, Sperling, Roehl, Harris & Sisk, Leland S. Sedberry, Jr., Keleher & McLeod, Russell Moore, Albuquerque, for defendants-appellees.

OPINION

McMANUS, Chief Justice.

This is what remains of a lawsuit originally filed jointly on April 1, 1969 by Fred and Earline Chapman (hereinafter Chapmans), now defendant-appellees, and Security Insurance Company (hereinafter S.I.C.), now plaintiff-appellant, against defendant-appellees, Presbyterian Hospital Center, members of its staff, and Doctors Edwin B. Herring and George Atkinson, for injuries allegedly sustained by Fred Chapman as a result of the negligence of the hospital and doctors in administering the wrong type of blood to him on November 8, 1966, in the course of an operation and other medical treatment. In this initial lawsuit the Chapmans sought damages for injuries and losses allegedly caused by the mismatch of Fred Chapman's blood, while S.I.C. sought reimbursement for medical expenses and compensation benefits allegedly paid out pursuant to New Mexico workmen's compensation laws as a result of the medical negligence which aggravated Chapman's original injury.

The Chapmans settled their lawsuit without notifying or consulting with S.I.C. As a part of this settlement, the hospital and doctors agreed to indemnify Chapman against any subrogation claim on the proceeds of the settlement which S.I.C. might bring against him based upon payments it allegedly made on his behalf because of the mismatch of blood.

Following the settlement, there were numerous motions, orders and claims made by the parties. Ultimately, S.I.C. amended its complaint to include one count against the Chapmans for reimbursement of that portion of the medical expenses and compensation paid out which S.I.C. attributes to the mismatch of blood, and a second count against all the defendants for a declaratory judgment to determine the rights and obligations of the various parties. All defendants moved for dismissal and the trial court dismissed the complaint with prejudice on the basis that it failed to state a claim upon which relief could be granted.

S.I.C. appeals from this decision on two grounds. The first is that § 59--10--19.1(B), N.M.S.A. 1953 (2d Repl.Vol. 9, pt. 1, 1974) upon which defendants rely, is inapplicable to the case at bar. This section of the New Mexico Workmen's Compensation Act provides:

'In case the employer has made provisions, for, and has at the service of the workmen at the time of the accident, adequate surgical, hospital and medical facilities and attention and offers to furnish these services during the period necessary, then the employer shall be under no obligation to furnish additional surgical, medical or hospital services or medicine than those so provided; Provided, however, that the employer furnishing such surgical, medical and hospital services and medicines shall be liable to the workmen for injuries resulting from neglect, lack of skill, or care on the part of any person, partnership, corporation or association employed by the employer to care for the workman. In the event however, that any employer becomes so liable to the workmen, it shall be optional with the workmen injured in such a manner to accept the foregoing provisions and hold the employer liable for the injuries, or to reject these provisions and retain the right to sue the person, partnership, corporation or association employed by the employer who injures the workmen through neglect, lack of skill or care. Election to accept or reject the provisions of this section shall be made by a notice in writing, signed and dated, given by the workmen to his employer; and, if the workman elects to hold the employer liable for the injuries, the cause of action of the workmen against the third person partnership, corporation or association shall be assigned to the employer, who may institute proceedings thereon in any court having jurisdiction, in the workman's name.'

We hold that this section does apply to the case at bar. Appellant, S.I.C., argues that this statute was intended to cover only those situations where an employer actually maintains hospital and medical facilities for the employees. Under the facts presented here Chapman was both the employer and the employee. After sustaining an injury during the course of his employment, Chapman was admitted to Presbyterian Hospital for surgery and other medical treatment. Notice of the accident and injury was given to S.I.C., which then undertook its obligation to pay Chapman's medical expenses as well as compensation to him. We conclude that under these circumstances the employer did make provisions for, and furnish hospital and medical facilities to the employee within the meaning of the statute. The employer, through its insurance company, did pay the employee's medical bills, which was all that was necessary under the circumstances. Were this section of the Workmen's Compensation Act only to apply where the employer maintained a hospital or clinic exclusively for its employees, as the appellant argues, then there would rarely be an employee in New Mexico who would benefit from its provisions. It seems to its incredible that the legislature intended such a narrow application of this section. We construe § 59--10--19.1(B) of the New Mexico Workmen's Compensation Act in favor of the claimant, as we are required to do since this act is remedial legislation and must be construed liberally to effect its purpose. Mascarenas v. Kennedy, 74 N.M. 665, 667--668, 397 P.2d 312, 314 (1964). The purpose of § 59--10--19.1(B), supra, was to give workmen the option of holding their employers liable for the negligence of the doctors or other medical personnel treating them for their work-related injuries, or to hold the doctors or other medical personnel liable directly. To effect this purpose, we hold that Chapman in this case had that option under the statute.

The second ground upon which the plaintiff-appellant, S.I.C., relies is that it had either an equitable right of subrogation or a statutory right to reimbursement. As to the equitable right of subrogation, the plaintiff has not properly presented that theory here. The first cause of action in the plaintiff's complaint is a claim for reimbursement from Chapman under the Workmen's Compensation Act. The second is a claim for declaratory relief. Plaintiff is now appealing from the dismissal of these two causes of action. The issue of his alleged right of subrogation was not raised in the district court. We have stated that '(i)t is fundamental that matters not brought into issue by the pleadings and upon which no decision of the trial court was sought, or fairly invoked, cannot be raised on appeal.' Groendyke Transp., Inc. v. New Mexico St. Corp. Com'n, 85 N.M. 718, 723, 516 P.2d 689, 693 (1973). See also Romero v. Sanchez, 86 N.M. 55, 56, 519 P.2d 291, 292 (1974), Supreme Court Rule 20(1), (2), (§ 21--2--1(20)(1), (2), N.M.S.A., Repl. Vol. 4, 1970). Consequently, we will not consider this issue.

S.I.C. bases its statutory right to reimbursement on § 59--10--25(C), N.M.S.A.1953 (2d Repl.Vol. 9, pt. 1, 1974) which provides:

'The right of any workman, or, in case of his death, of those entitled to receive payment or damages for injuries occasioned to him by the negligence or wrong of any person other than the employer or any other employee of the employer, including a management or supervisory employee, shall not be affected by the Workmen's Compensation Act, but he or they, as the case may be, shall not be allowed to receive payment or recover damages therefor and also claim compensation from the employer, and in such case the receipt of compensation from the employer shall operate as an assignment to the employer, his or its insurer, guarantor or surety, as the case may be of any cause of action, to the extent of payment by the employer to the workman for compensation, surgical, medical, osteopathic, chiropractic, and hospital services and medicine occasioned by the injury which the workmen or his legal representative or others may have against any other party for the injuries or death.'

This section of the New Mexico Workmen's Compensation Act has been consistently interpreted as a reimbursement statute involving only one cause of action. Under it the workmen sues the third party tort-feasor for the entire amount of damages and the employer or insurer is reimbursed out of amounts received by the workman. Herrera v. Springer Corporation, 85 N.M. 6, 8, 508 P.2d 1303, 1305 (Ct.App.1973), aff'd in part, 85 N.M. 201, 510 P.2d 1072 (1973); Castro v. Bass, 74 N.M. 254, 257--58, 392 P.2d 668, 671 (1964); Kandelin v. Lee Moor Contracting Co., 37 N.M. 479, 24 P.2d 731 (1933).

The appellant argues that it is entitled to reimbursement to the extent that it compensated the employee, Chapman, for an injury for which that employee subsequently recovered settlement damages. Appellant stresses that part of § 59--10--25(C), supra, which states that the workman 'shall not be allowed to receive payment or recover damages therefor and also claim compensation from the employer.' According to the appellant, if the Chapmans were allowed to enjoy the benefits of the compensation, and also retain the entire amount of the settlement made with the hospital and doctors, this would constitute a double recovery.

This court has held that once an employee has recovered a judgment against a third-party tort-feasor, that employee may not thereafter claim compensation for the same injury. Castro v. Bass, supra; White...