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1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

2 LUCIANO GALLEGOS, 

3 Plaintiff-Appellant, 

4 v. NO. 31,757

5 NEW MEXICO TECH a/k/a,

6 NEW MEXICO INSTITUTE OF

7 MINING AND TECHNOLOGY,

8 Defendant-Appellee. 

9 APPEAL FROM THE DISTRICT COURT OF SOCORRO COUNTY

10 Matthew G. Reynolds, District Judge

11 Joseph David Camacho

12 Albuquerque, NM

13 for Appellant

14 Keleher & McLeod, P.A.

15 Sean Olivas

16 Christina Muscarella Gooch

17 Albuquerque, NM

18 for Appellee

19 MEMORANDUM OPINION

20 ZAMORA, Judge.
2

1 {1} Luciano Gallegos (Plaintiff) appeals a district court order awarding New

2 Mexico Institute of Mining and Technology (Defendant) post-offer costs pursuant to

3 Rule 1-068 NMRA. Plaintiff argues that the district court’s application of Rule 1-068

4 was inequitable and reversal is warranted in light of the “totality of the circumstances”

5 in this case. We conclude that the district court properly applied Rule 1-068 and affirm

6 the award of post-offer costs to Defendant.

7 BACKGROUND

8 {2} On October 14, 2005, Plaintiff was working on Defendant’s premises and

9 sustained injuries when a 17,000 pound steel roller, owned by Defendant, went out of

10 control, pinning Plaintiff between a truck and a chip spreader. As a result of the

11 accident Plaintiff suffered injuries including a chest wall contusion, a liver hematoma,

12 a lower rib dislocation, meniscal tears in his knee, and post-traumatic stress disorder

13 (PTSD). Plaintiff’s abdominal and liver injuries appeared to be healed within

14 approximately six weeks of the accident, however, Plaintiff’s knee injury and PTSD

15 continued to require treatment. Plaintiff was concurrently treated for shoulder pain.

16 Plaintiff reported to his orthopedist that the accident had injured his shoulder.

17 However, it was later determined that Plaintiff’s shoulder problems were caused by

18 a pre-existing condition, not by the accident.
3

1 {3} Plaintiff filed a complaint for personal injuries in the district court. The New

2 Mexico County Insurance Authority (NMCIA), Plaintiff’s worker’s compensation

3 insurer, sought leave to intervene to protect its subrogation interests for benefits paid

4 to Plaintiff. The district court held that NMCIA’s interests would be adequately

5 protected without intervention until the conclusion of the case, just before the

6 judgment on damages was going to be entered. Prior to trial, Defendant tendered an

7 offer of settlement in the amount of $400,000. Plaintiff rejected that offer and

8 ultimately recovered a total award of $373,408.23, which was less than the offer of

9 settlement. NMCIA, who had been permitted to intervene on the final day of trial, ,

10 worked with Plaintiff to compromise the amount of its subrogation lien to $96,186.45,

11 of which Plaintiff’s counsel was entitled to $45,631.08 in fees and costs. {4} Pursuant

12 to Rule 1-068, Defendant moved for its costs as of the date of the offer of judgment.

13 The district court awarded Defendant the recovery of post-offer costs in the amount

14 of $24,226.91. Plaintiff filed a motion for reconsideration of the district court’s award

15 of post-offer costs to Defendant. The district court denied Plaintiff’s motion for

16 reconsideration. This appeal followed.

17 DISCUSSION

18 {5} Plaintiff argues the district court’s rigid application of Rule 1-068 is inequitable

19 and should be reversed because: (1) it punishes him for reasonably rejecting
4

1 Defendant’s offer of settlement, and (2) Plaintiff is unable to pay Defendant’s post2 offer costs. We are not persuaded.

3 {6} Whether an award of costs is mandatory in this case is an issue of rule

4 interpretation which we review de novo. Apodaca v. AAA Gas Co., 2003-NMCA-085,

5 ¶ 99, 134 N.M. 77, 73 P.3d 215. Where a plaintiff rejects a defendant’s pre-trial offer

6 of settlement and ultimately obtains a judgment that is less than the defendant’s pre7 trial offer, the award of costs is governed by Rule 1-068. Montoya v. Pearson, 2006-

8 NMCA-097, ¶ 22, 140 N.M. 243, 142 P.3d 11. Rule 1-068 states in pertinent part: 

9 If an offer of settlement made by a defending party is not accepted and

10 the judgment finally obtained by the claimant is not more favorable than

11 the offer, the claimant must pay the costs, excluding attorney’s fees,

12 incurred by the defending party after the making of the offer and shall

13 not recover costs incurred thereafter.

14 It is well settled that when the plaintiff receives a judgment that is less than the

15 defendant’s offer of settlement, the application of Rule 1-068 is mandatory and the

16 plaintiff must pay the defendant’s post-offer costs. See Dunleavy v. Miller, 1993-

17 NMSC-059, ¶ 30, 116 N.M. 353, 862 P.2d 1212 (“[W]hen the plaintiff receives a

18 judgment that is less than the offer of judgment, he or she . . . must pay his or her own

19 post[-]offer costs as well as the defendant’s post[-]offer costs.” (emphasis added));

20 Montoya, 2006-NMCA-097, ¶ 22 (stating that “there is no discretion in the application
5

1 of Rule 1-068”); Apodaca , 2003-NMCA-085, ¶ 101 (stating that Rule 1-068 is

2 “mandatory where a judgment for a plaintiff is less than the offer”).

3 {7} In this case, Defendant made a pre-trial offer to settle the case for $400,000.

4 Plaintiff rejected this offer. After trial, the district court entered a judgment in favor

5 of Plaintiff, including attorney fees and costs, in the amount of $373,408.23. Because

6 the judgment was less than the pre-trial offer, Plaintiff must pay Defendant’s post7 offer costs pursuant to Rule 1-068. Plaintiff contends that his rejection of Defendant’s

8 offer of settlement was reasonable because: (1) he expected the damages award to be

9 significantly higher; (2) NMCIA held a sizeable subrogation lien; and (3) Plaintiff’s

10 counsel also represented NMCIA, precluding Plaintiff from accepting the offer of

11 settlement. And, Plaintiff argues, because rejecting the offer was reasonable under the

12 circumstances Rule 1-068 should not be applied. We disagree. 

13 {8} First, we reject Plaintiff’s assertion that his counsel also represented NMCIA.

14 An attorney-client relationship is created by court appointment or by contract. Holland

15 v. Lawless, 1981-NMCA-004, ¶ 5, 95 N.M. 490, 623 P.2d 1004. Here, the district

16 court did not permit NMCIA to intervene prior to the judgment stage of the suit. Until

17 the final day of trial when NMCIA did intervene, it was not a party in the litigation,

18 even though it did have a protected interest in the outcome. Through the course of the

19 proceedings, NMCIA was represented by independent counsel. As a result, there was
6

1 no dual representation or conflict of interest. Plaintiff’s counsel owed Plaintiff

2 undivided loyalty and NMCIA’s interest did not preclude Plaintiff from accepting

3 Defendant’s offer of settlement. See State v. Almanza, 1996-NMCA-013, ¶ 4, 121

4 N.M. 300, 910 P.2d 934 (“The client is entitled to the undivided loyalty of the

5 attorney.”).

6 {9} With regard to NMCIA’s lien and Plaintiff’s expectation that the damages

7 award would exceed the offer of settlement, we hold that because the application of

8 Rule 1-068 is mandatory, not discretionary, these are not factors to be considered by

9 the district court when applying the rule. Nor would it have been proper for the district

10 court to consider Plaintiff’s ability to pay Defendant’s costs. See Montoya, 2006-

11 NMCA-097, ¶ 22 (“The ability of the party liable for costs to pay those costs is a

12 factor that may be considered under Rule 1-054 NMRA, where the [district] court has

13 some discretion in the matter. But because there is no discretion in the application of

14 Rule 1-068, the [district] court’s ruling that [the p]laintiff should not be required to

15 pay costs because he could not afford them cannot stand.” (emphasis added)). 

16 {10} Plaintiff’s reliance on Apodaca to support the proposition that a district court

17 has the authority and discretion to avoid “shifting” costs based on a plaintiff’s

18 indigency is misdirected. In Apodaca, a judgment was entered in favor of the

19 defendant. The defendant filed for costs, as a prevailing party, under Rule 1-054(D)
7

1 and for post-offer costs under Rule 1-068. Apodaca, 2003-NMCA-085, ¶ 96. The

2 defendant argued it did not matter whether the judgment was for or against the

3 plaintiffs, the award of costs was mandatory under Rule 1-068 when the offer

4 exceeded the judgment. The plaintiffs’ opposition to costs under Rule 1-054(D) was

5 based on their inability to pay. Id. ¶ 102. They argued that Rule 1-068 should be

6 harmonized with Rule 1-054, which gives the district court discretion in awarding

7 costs. Id. ¶ 98. The essential question before this Court was whether “Rule 1-068

8 applie[d] where judgment is entered in favor of [a] defendant-offeror.” Id. ¶ 99. This

9 Court concluded Rule 1-068 does not apply where a judgment is entered in the

10 defendant’s favor and that the proper relief was found under Rule 1-054, which is

11 discretionary. Id. ¶¶ 101-02. This Court did not deviate from the its longstanding

12 position that Rule 1-068 is mandatory even in the situation “where a judgment for a

13 plaintiff is less than [the defendant’s] offer.” Id. ¶ 101

14 {11} To the extent that Plaintiff requests that this Court invoke equity to reverse the

15 district court’s award of costs, we decline to do so here. We will only disturb a district

16 court’s decision to grant or deny equitable relief upon finding an abuse of discretion.

17 Gilmore v. Gilmore, 2010-NMCA-013, ¶ 24, 147 N.M. 625, 227 P.3d 115. “An abuse

18 of discretion occurs when a ruling is clearly contrary to the logical conclusions
8

1 demanded by the facts and circumstances of the case.” Sims v. Sims, 1996-NMSC-078,

2 ¶ 65, 122 N.M. 618, 930 P.2d 153.

3 {12} In this case, after the district court awarded Defendant post-offer costs, Plaintiff

4 moved for reconsideration, requesting that the district court apply equity to avoid a

5 “harsh result of a reasonable decision in rejecting an offer of settlement.” Plaintiff’s

6 motion was denied. Plaintiff argues that the district court erred in failing to consider

7 the NMCIA’s $364,000 subrogation lien, however, at the time Plaintiff moved for

8 reconsideration, NMCIA had agreed to accept $96,186.45 to satisfy its lien and out

9 of that amount it would pay Plaintiff’s counsel $45,631.08 for his fees and costs.

10 Additionally, at the time that the district court denied Plaintiff’s motion for

11 reconsideration, it had been established that Plaintiff’s damages claims were inflated

12 due to the inclusion of expenses related to the pre-existing shoulder injury for which

13 Defendant was not liable. Given these circumstances, we cannot conclude that the

14 district court abused its discretion in denying Plaintiff’s motion for reconsideration.

15 {13} Plaintiff also argues that this court should use its inherent equitable powers to

16 avoid the application of Rule 1-068. Plaintiff’s argument requires a departure from

17 established precedent which makes the application of Rule 1-068 mandatory. See

18 Dunleavy, 1993-NMSC-059, ¶ 30; see also Montoya, 2006-NMCA-097, ¶ 22;

19 Apodaca, 2003-NMCA-085, ¶ 101.
9

1 {14} An appellate court may not use its equitable powers to depart from established

2 precedent without special justification. N.M. Right to Choose/NARAL v. Johnson,

3 1999-NMSC-028, ¶ 11, 127 N.M. 654, 986 P.2d 450 (stating that “[s]tare decisis is

4 the judicial obligation to follow precedent, and it lies at the very core of the judicial

5 process of interpreting and announcing law[,]” and holding that “any departure from

6 [precedent] . . . demands special justification” (omission in original) (internal

7 quotation marks and citation omitted)). When determining whether special

8 justification to depart from precedent exists, we consider the following factors:

9 1) whether the precedent is so unworkable as to be intolerable; 2)

10 whether parties justifiably relied on the precedent so that reversing it

11 would create an undue hardship; 3) whether the principles of law have

12 developed to such an extent as to leave the old rule “no more than a

13 remnant of abandoned doctrine;” and 4) whether the facts have changed

14 in the interval from the old rule to reconsideration so as to have “robbed

15 the old rule” of justification.

16 Trujillo v. City of Albuquerque, 1998-NMSC-031, ¶ 34, 125 N.M. 721, 965 P.2d 305

17 (internal quotation marks and citation omitted). 

18 {15} Plaintiff does not argue, nor cite authority to support the proposition that the

19 factors listed above justify a departure from our precedent, which requires the

20 mandatory application of Rule 1-068 in this case, and we have found none.

21 Accordingly, we decline to depart from established precedent here. See In re Adoption

22 of Doe, 1984-NMSC-024, ¶ 2, 100 N.M. 764, 676 P.2d 1329 (holding that where a
10

1 party cites no authority to support an argument, we may assume no such authority

2 exists); See also Headley v. Morgan Mgmt. Corp., 2005-NMCA-045, ¶ 15, 137 N.M.

3 339, 110 P.3d 1076 (holding that this [C]ourt has no duty to review an argument that

4 is not adequately developed and declining to entertain a cursory argument that relied

5 on several factual assertions that were made without citation to the record or

6 authority); ITT Educ. Servs., Inc. v. Taxation & Revenue Dep’t, 1998-NMCA-078,

7 ¶ 10, 125 N.M. 244, 959 P.2d 969 (holding that this Court will not consider

8 propositions that are unsupported by citation to authority).

9 CONCLUSION

10 {16} For the foregoing reasons, we affirm the district court’s award of post-offer

11 costs to Defendant. 

12 {17} IT IS SO ORDERED.

13 _______________________________

14 M. MONICA ZAMORA, Judge

15 WE CONCUR:

16 ____________________________

17 TIMOTHY L. GARCIA, Judge

18 ____________________________

19 J. MILES HANISEE, Judge