Zamora v. CDK Contracting Co., Inc.

• Decision Date: 02 July 1987
• Docket Number: No. 9596,9596
• Citation: 106 N.M. 309,742 P.2d 521,1987 NMCA 93
• Parties: Paula ZAMORA, Individually, and as Custodian and Next Friend of Christina Zamora, Tyrel Zamora and Jesus Zamora, Plaintiff-Appellee, v. CDK CONTRACTING COMPANY, INC., Employer, and Wausau Insurance Companies, Employers Insurance of Wausau, Insurer, Defendants-Appellants.
• Court: Court of Appeals of New Mexico

Page 521

742 P.2d 521

106 N.M. 309

Paula ZAMORA, Individually, and as Custodian and Next Friend of Christina Zamora, Tyrel Zamora and Jesus Zamora, Plaintiff-Appellee, v. CDK CONTRACTING COMPANY, INC., Employer, and Wausau Insurance Companies, Employers Insurance of Wausau, Insurer, Defendants-Appellants.

No. 9596.

Court of Appeals of New Mexico.

July 2, 1987.

Certiorari Quashed Sept. 10, 1987.

[106 NM 309] Mark B. Thompson, III, Douglas R. Vadnais, Douglas G. Schneebeck, Modrall, Sperling, Roehl, Harris & Sisk, P.A., Albuquerque, for defendants-appellants.

Gordon E. Berman, Pickett & Holmes, Las Cruces, for plaintiff-appellee.

OPINION

BIVINS, Judge.

In this worker's compensation case, the trial court awarded plaintiff a lump-sum payment in lieu of future weekly payments. The employer, CDK Contracting Co., Inc. (CDK), and its worker's compensation insurer, Wausau Insurance Companies (Wausau), appeal the award, raising two issues: (1) whether plaintiff's request for a lump-sum award is barred as premature when she and her children are receiving maximum compensation benefits; and (2) whether plaintiff made the proper showing below to justify consideration of the request for a lump-sum award by the trial court.

We hold that the action is not premature, but that the evidence presented does not justify a lump-sum award. Accordingly, we reverse.

Orlando Zamora died as a result of an accidental injury on January 3, 1984, which arose out of and in the course of his employment with CDK. The worker's compensation insurance carrier promptly and voluntarily commenced payments of all weekly benefits at the proper rate and continues such payments to date. It has also paid other benefits due on account of the worker's death.

Paula Zamora, on her own behalf as surviving widow, and on behalf of the surviving minor children, initially filed this action for an increase in benefits, claiming failure of the employer to provide a safety device, and also for a lump-sum award of benefits. Defendants moved to dismiss. The parties settled the safety device issue and the trial court entered an order dismissing that claim with prejudice.

Shortly thereafter, the trial court issued a letter opinion holding defendants' contention that plaintiff's "claim" was premature did not provide a proper basis for dismissal; however, it determined the complaint must be dismissed without prejudice for failure to state the necessary allegations for the court to entertain a claim for a lump-sum award. Before entering an order of dismissal, plaintiff obtained leave to amend her complaint. While admitting the accidental death arising out of and in the course of employment, defendants continued to assert as a bar the premature filing section of the Workmen's Compensation Act, based on their payment of maximum benefits.

Following a hearing, the trial court found in favor of plaintiff and the children, and entered judgment awarding them $90,660.96, which represents the lump-sum present value of all future compensation benefits, discounted at five percent, less weekly benefits paid from time of judgment to satisfaction. The trial court also awarded costs and attorney fees, and retained jurisdiction to approve plaintiff's home purchasing plan and oversee investment to assure use for the children.

1. PREMATURE FILING

Defendants' first issue is based upon NMSA 1978, Section 52-1-69, and a number of cases decided thereunder. E.g., Neumann v. A.S. Horner, Inc., 99 N.M. 603, 661 P.2d 503 (Ct.App.1983). Section 52-1-69 provides:

No claim shall be filed by any workman who is receiving maximum compensation benefits; provided, however, a workman claiming additional compensation benefits, because of his employer's alleged failure to provide a safety device, may file suit therefor, but in such event only the safety device issue may be determined therein. [Emphasis added.]

Defendants contend they are paying plaintiff maximum compensation benefits and that plaintiff is therefore barred under Section 52-1-69 from claiming a right to compensation. Because lump-sum awards first require a determination of the right to compensation, defendants contend further that plaintiff cannot seek a lump-sum award.

We hold that the plain wording of Section 52-1-69 refers only to the "workman." In previous cases discussing the relationship between Section 52-1-69 and NMSA 1978, Section 52-1-30(B), we have not addressed precisely whether the prematurity defense applies to requests for a lump-sum settlement made by dependents of deceased workers, as opposed to requests for a lump-sum made by permanently, totally disabled workers. We do so now and determine that Section 52-1-69 does not apply to dependents.

We give effect to statutes as written. Garrison v. Safeway Stores, 102 N.M. 179, 692 P.2d 1328 (Ct.App.1984). Defendants' citation to cases where the prematurity defense was raised against dependents' requests for a lump-sum settlement and held not to apply on other grounds does not persuade us. Defendants cite to Arther v. Western Co. of North America, 88 N.M. 157, 538 P.2d 799 (Ct.App.1975), for the proposition that Section 52-1-69 also applies to suits by dependents of the worker. Contrary to defendants' citation, however, both Arther and Livingston v. Loffland Brothers Co., 86 N.M. 375, 524 P.2d 991 (Ct.App.1974), allowed dependents to file a claim.

Section 52-1-69 expressly applies to "any workman." It does not say "workman or dependents." Other provisions of the Act clearly distinguish between workmen and dependents. See, e.g., NMSA 1978, Sec. 52-1-31. "The rights and remedies of the worker * * * are separate and distinct from those of his dependents. A dependent's claim is not derivative of the worker, but is given him by statute independent of the worker. See generally A. Larson, The Law of Workmen's Compensation, Sec. 64.10 (1978)." Pedrazza v. Sid Fleming Contractor, Inc., 94 N.M. 59, 63, 607 P.2d 597, 601 (1980). See NMSA 1978, Sec. 52-1-16 (Cum.Supp.1985) (defining "workman"), and NMSA 1978, Sec. 52-1-17 (defining "dependents").

Valid reasons exist for the legislature's exclusion of dependents from Section 52-1-69. When the worker is receiving maximum compensation benefits for disability, a claim for benefits, except additional compensation for failure to provide a safety device, is indeed premature. The worker's entitlement to future compensation payments is contingent upon the totality and permanency of his or her disability. Sec. 52-1-30(B). See Neumann v. A.S. Horner, Inc. (employee must establish permanency and totality of injury to seek a lump-sum payment). The purpose of Section 52-1-69, to avoid unnecessary litigation where the employer is already paying maximum compensation benefits, Armijo v. Co-Con Construction Co., 92 N.M. 295, 296, 587 P.2d 442, 443 (Ct.App.1978), is served. The worker is barred from making a claim for compensation benefits he is already receiving.

In contrast, the death of a worker raises different concerns. No question of disability, total or permanent, is raised. Other defenses, such as lack of notice, expiration of a statute of limitations, or the death not arising out of the employment, might be raised. Where these defenses are present, however, the employer would not likely commence payment or, if it did, then within a reasonable time the employer would probably investigate and decide whether to continue payments. On the other hand, even if other defenses exist, in the case of a disabled worker, incentives exist to continue payments. The goal of rehabilitation, balanced with the costs of trial, encourages a carrier to continue payments and to serve best the purpose of the Act.

We recognize that the result we have reached might discourage payments to dependents. This is not our intent. Continuing payments to dependents should not be discouraged because when a case is resolved, the carrier will receive credit for the amounts paid. Neither do we intend to encourage dependents to seek blanket commutations to lump-sum benefits. Dependents are still bound by the clear legislative preference for periodic payments and the strict guidelines applicable to commutations. Moreover, dependents receiving periodic payments should be reluctant to seek a lump-sum payment when to do so might result in an adverse decision on defenses the employer was willing to hold in abeyance. We finally point out that had the legislature intended for Section 52-1-69 to bar claims by dependents, it could have so stated.

Having decided that Section 52-1-69 does not apply, we must determine whether the trial court had authority under Section 52-1-30(B) to entertain plaintiff's request for a lump-sum award. Section 52-1-30(B) provides the authority to commute benefits. However, the right to the benefits must first be established. Arther v. Western Co. of N. Am. The reason is obvious: the trial court cannot commute an award until the amount has been established.

This right can be established by: (1) adjudication, Lamont v. New Mexico Military Institute, 92 N.M. 804, 595 P.2d 774 (Ct.App.1979); (2) stipulation, Livingston v. Loffland Brothers Co.; or (3) admissions of the employer, Arther v. Western Co. of North America. In the case of a worker (not decedent), Section 52-1-69 bars a claim to establish such a right while defendants are paying maximum benefits. In our case, we have determined that Section 52-1-69 does not apply to a deceased worker's dependents. Therefore, in order for plaintiff to petition for a commutation, or for the court to have authority to grant any commutation, a right to compensation must first be established.

Defendants have consistently urged that plaintiff's petition for a lump-sum award is premature because her entitlement to benefits has never been established. We disagree. Defendants, by admitting in their answer the allegations that Mr. Zamora was killed in an industrial accident arising out of and in the course of...