Opinion ID: 891657
Heading Depth: 2
Heading Rank: 3

Heading: The Plan's right of action against Guardian for breach of the Policy may be garnished.

Text: {39} Kirby seeks to enforce her judgment against the Plan by attaching its only asset: the Policy. See Midwest Cmty. Health Serv., Inc. v. Am. United Life Ins. Co., 255 F.3d 374, 377 (7th Cir.2001) (stating contract of insurance issued by insurer for benefit of plan is plan asset). The Court of Appeals concluded that the Policy could not be garnished because it is not a debt or personal property of the Plan and, in any event, requires payment of benefits directly to plan beneficiaries, not to the Plan. Kirby II, 2008-NMCA-154, ¶¶ 9-11, 145 N.M. 264, 196 P.3d 965. We disagree with the Court of Appeals on this first point because the analysis is incomplete; it does not address the validity of the Plan's right of action against Guardian. The next argument does not persuade us because it focuses on the flow of benefits payments established by the Policy, not on the flow of liability for breach of the Policy. {40} We turn first to an evaluation of the Plan's right of action against Guardian. The Court of Appeals relied entirely on ERISA law in evaluating the Plan's right of action against Guardian, presumably in accordance with ERISA preemption. See id. ¶ 11; § 1144(a). The Court reasoned that the Plan does not have standing to sue under § 1132(a)(3), and even if it did, § 1132(a)(3) only allows for equitable relief (not legal relief in the form of damages). Kirby II, 2008-NMCA-154, ¶ 11, 145 N.M. 264, 196 P.3d 965. Thus, the Court failed to decide whether Guardian had breached its obligations under the terms of the Policy. We do so here. In subsection (1), we explain why ERISA does not preempt the application of our garnishment law. In subsection (2), we analyze the present dispute under our garnishment law and explain why Guardian's refusal to pay benefits following the default judgment constituted a breach of the Policy, creating a valid right of action in the Plan subject to Kirby's writ of garnishment.
{41} ERISA is a comprehensive statute, preempting all state laws relating to employee benefits plans. See § 1144(a); see also § 1144(c)(1) (The term `State law' includes all laws, decisions, rules, regulations, or other State action having the effect of law....). ERISA also retains original jurisdiction almost exclusively in the federal district courts to adjudicate employee benefits disputes; concurrent state court jurisdiction extends only to claims for wrongful denial of benefits under § 1132(a)(1)(B). See § 1132(e)(1). Kirby's suit against the Plan was one for wrongful denial of benefits, and so was properly prosecuted in state court, resulting in the default judgment in Kirby's favor. However, given the broad scope of ERISA's preemption provision, we first inquire whether application of our garnishment statute is rendered inappropriate by ERISA. [2] We conclude that ERISA does not preempt Kirby's garnishment action. {42} ERISA preemption analysis must operate from the starting presumption that Congress does not intend to supplant state law. N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 654, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995). As the Supreme Court has held on several occasions, to determine whether a state law has the forbidden connection, we look both to `the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive,' as well as to the nature of the effect of the state law on ERISA plans. Egelhoff v. Egelhoff, 532 U.S. 141, 147, 121 S.Ct. 1322, 149 L.Ed.2d 264 (2001) (quoting Cal. Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316, 325, 117 S.Ct. 832, 136 L.Ed.2d 791 (1997)). In enacting § 1144 of ERISA, Congress intended to ensure that plans and plan sponsors would be subject to a uniform body of benefits law; the goal was to minimize the administrative and financial burden of complying with conflicting directives among States or between States and the Federal Government [and to prevent] the potential for conflict in substantive law..., requiring the tailoring of plans and employer conduct to the peculiarities to the law of each jurisdiction. Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 142, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990) (citation omitted). The United States Supreme Court has further clarified that a state law is preempted by ERISA when it [provides] a form of ultimate relief in a judicial forum that add[s] to the judicial remedies provided by ERISA, because such a law undermines ERISA's goal of assuring a predictable set of liabilities, under uniform standards of primary conduct and a uniform regime of ultimate remedial orders and awards when a violation has occurred. Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 379, 122 S.Ct. 2151, 153 L.Ed.2d 375 (2002). Thus, ERISA preemption depends on whether a state law creates a new cause of action, or authorizes a new form of ultimate relief, in conflict with ERISA's comprehensive enforcement scheme. Id. Application of our garnishment law to enforce Kirby's judgment against the Plan does neither. {43} First, Guardian's liability under the writ of garnishment is no greater than that of the Plan under the default judgment, and the Plan's liability was determined entirely under the law of ERISA. As the Plan's insurer, Guardian is responsible for payment of disability benefits to eligible employees, and the writ of garnishment does nothing to alter the amount a beneficiary may recover or the terms of eligibility provided for in the Policy in accordance with ERISA. By enforcing Guardian's obligations under the terms of the Policy, we impose no more liability upon Guardian than does ERISA itself: a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries ... in accordance with the documents and instruments governing the plan. Section 1104(a)(1)(D). That Guardian would be liable for paying benefits under the Policy, after a beneficiary prevails on an § 1132(a)(1)(B) action against the plan, is eminently predictable. {44} Second, application of our garnishment law does nothing to alter ERISA's remedial scheme or the form of ultimate relief that Kirby can obtain. Section 1132(a)(1)(B) allows for reinstatement of benefits wrongly denied and § 1132(g) allows for recovery of reasonable attorney's fees by the prevailing party. Kirby's ultimate relief reinstatement of benefits and recovery of attorney's feesis exactly the form of ultimate relief provided in ERISA. Garnishment is merely a means of enforcing the remedies awarded in a separate judgment. As such, ERISA's remedial scheme remains unaffected by our ruling today. {45} Guardian contends that § 1132(d)(2) expressly prohibits imposing liability on anyone other than the Plan. That provision states: Any money judgment under this subchapter against an employee benefit plan shall be enforceable only against the plan as an entity and shall not be enforceable against any other person unless liability against such person is established in his individual capacity under this subchapter. Section 1132(d)(2). While there is some authority supporting Guardian's interpretation, the federal courts are divided both as to the meaning and the effect of § 1132(d)(2). Compare Mote v. Aetna Life Ins. Co., 502 F.3d 601, 610 (7th Cir.2007) ([Consistent with § 1132(d)(2)], in a suit for ERISA benefits, the plaintiff is limited to a suit against the Plan. (Internal quotation marks and citation omitted.)), and Hackner v. Long Term Disability Plan, 81 Fed.Appx. 589, 593-94 (7th Cir.2003) (insurer dismissed because, under § 1132(d)(2), plan was the only party against whom a money judgment could be enforced), with Hunt v. Hawthorne Assoc., Inc., 119 F.3d 888, 908 (11th Cir.1997) ([N]othing in ERISA permits the district court to issue an injunctive order solely against the plan.... [A]n order enjoining the payment of benefits from an ERISA plan must issue against a party capable of providing the relief requested. (Citing § 1132(d)(2).)), and Sparks v. Duckrey Enters., Inc., No. 05-2178, 2007 WL 320260, at  (E.D.Pa. Jan. 30, 2007) (citing several district courts as holding that the proper defendants to a claim brought under § 502(a)(1)(B) ... are the plan itself and its fiduciaries). {46} The one consistent interpretation of § 1132(d)(2) we can discern from the federal cases is that the statute envisions a money judgment against the Plan as an entity, and not against any individual representatives of the Plan in their individual capacities. See, e.g., Leonelli v. Pennwalt Corp., 887 F.2d 1195, 1199 (2d Cir.1989) (barring suit against individual corporate representatives because [i]n a recovery of benefits claim, only the plan and the administrators and trustees of the plan in their capacity as such may be held liable); Davis v. Bante, No. 07-CV-12270, 2007 WL 2875244, at  (E.D.Mich. Sept. 28, 2007) (dismissing plaintiff's suit because named defendant, in individual capacity as Benefits Advisor, was an improper party under § 1132(d)(2)). This reading of § 1132(d)(2) is also consistent with the immediately preceding provision of § 1132(d)(1), which provides: An employee benefit plan may sue or be sued under this subchapter as an entity. Service of summons, subpoena, or other legal process of a court upon a trustee or an administrator of an employee benefit plan in his capacity as such shall constitute service upon the employee benefit plan. (Emphasis added.) Read together, the provisions of § 1132(d) authorize suit by and against the ERISA plan, while generally protecting individual decision-makers from liability. Critically, however, we do not read § 1132(d) as precluding a suit against another entity, such as an insurer like Guardian. {47} In contrast to the inconsistency between cases interpreting § 1132(d), the United States Supreme Court has spoken clearly that state judgment enforcement mechanisms do not violate ERISA's preemption provision. In Mackey, the Supreme Court held that while garnishment of ERISA benefits affects and involves ERISA plans, it is a state judgment enforcement mechanism that does not relate to an ERISA plan for pre-emption purposes. Mackey, 486 U.S. at 834, 108 S.Ct. 2182. The Mackey court held that state-law methods for collecting money judgments must, as a general matter, remain undisturbed by ERISA; otherwise, there would be no way to enforce such a judgment won against an ERISA plan. Id. Guardian's approach would have this Court endorse the paradoxical result of rendering unenforceable legitimate judgments against insured ERISA plans, an approach entirely at odds with Congressional intent. [3] Id. at 831, 108 S.Ct. 2182 (indicating that Congress did not intend to forbid the use of state-law mechanisms of executing judgments against ERISA welfare benefit plans). We conclude that ERISA does not preempt or preclude a state law garnishment action against an ERISA insurer to enforce a judgment entered against an ERISA plan. {48} Our conclusion today also follows closely upon the direction of the federal district court in this very matter. Seeking to collect its judgment against the Plan, Kirby went to federal court to assert a new claim against Guardian for wrongful denial of benefits under ERISA, § 1132(a)(1)(B), based on Guardian's refusal to pay the default judgment. Kirby also asserted an additional claim against Guardian for breach of fiduciary duty under ERISA, § 1132(a)(3). The federal court rejected Kirby's claims on a simple, practical ground. Since both claims arose out of Guardian's failure to pay the default judgment, appropriate relief could be found in state court by way of a garden-variety judgment enforcement action under state law. Kirby-Federal, slip op. at 15-25. {49} Specifically, with regard to the claim for wrongful denial of benefits, the federal court stated: [A]lthough the terms of the Plan related to whether Guardian should pay benefits on behalf of the Plan will be at issue [in the state judgment enforcement action], it is a collection and enforcement issue that only the state court can resolve. Id. at 18. With regard to Kirby's claim for breach of fiduciary duty, the federal court ruled that, while reinstatement of benefits would qualify as equitable relief under ERISA, such relief would be inappropriate because state enforcement of the default judgment would provide adequate alternative relief. Id. at 24. The federal court thus deferred to New Mexico state law for a method of enforcing the judgment against the Plan. In doing so, the federal court acknowledged that the terms of the Plan would be at issue, and to some extent ERISA law, but did not find such incidental inquiry to raise preemption concerns. Thus, in issuing the writ of garnishment our district court was, in a certain sense, simply following the very course that the federal court had previously described for Ms. Kirby to follow. {50} Our garnishment statute requires an evaluation of the judgment debtor's right of action against the garnishee. In the context of an ERISA plan arrangement, this determination will inevitably involve the terms of the plan document, and will affect the parties to the plan arrangement. Nevertheless, as a part of our state's garnishment analysis, that determination does not involve or upset the comprehensive enforcement scheme of ERISA, § 1132. As one federal district court opinion explains, [i]n order for pre-emption to even come into play, there must be some express or implied provision of ERISA which addresses the matter. Local Union 212 Int'l Bhd. of Elec. Workers Vacation Trust Fund v. Local 212 IBEW Credit Union, 549 F.Supp. 1299, 1302 (D.Ohio 1982). Both Mackey and Kirby-Federal make clear that judgment enforcement mechanisms, and garnishment in particular, are not addressed under ERISA. We agree, and in proceeding to apply state garnishment law, we see ourselves acting in harmony with what the federal court has already said about the role of state courts and state law in the enforcement of ERISA judgments.

{51} Guardian is bound by the terms of its Policy, which obligate it to pay benefits when disability is determined. Under the Policy, Guardian must pay benefits upon its own determination of the beneficiary's eligibility. The Policy also incorporates by reference all rights afforded beneficiaries under ERISA, which include administrative and judicial review of a denial by Guardian of a beneficiary's claim for benefits. Under ERISA, a beneficiary obtains judicial review, as Kirby has done here, by filing a claim for wrongful denial of benefits under § 1132(a)(1)(B). See Kirby-Federal, slip op. at 24 (Section 1132(a)(1)(B), coupled with state court judgment enforcement mechanisms, provide [Kirby] with adequate relief for her claim.). The result of a judicial determination of eligibility, then, is to replace Guardian's decision to deny benefits, thereby triggering Guardian's obligation to pay benefits in accordance with the Policy. {52} We have reviewed the Policy, and it leaves no ambiguity as to the entity charged with making disability payments, and the circumstances triggering that obligation. Kirby properly sued the Plan for wrongful denial of benefits under § 1132(a)(1)(B), and the result of that litigation was a valid default judgment in Kirby's favor. The time is long past to set aside the default judgment. Guardian correctly points out that this judgment was entered against the Plan, not Guardian. But the Policy imposes an obligation upon Guardian alone to make disability payments when the insurer or a court determines that a beneficiary is eligible under the terms of the Policy. That obligation gives rise to a legal right in the Plan to compel Guardian to make disability payments improperly denied. It is that right of action of the Plan against Guardian that Kirby is entitled to garnish. {53} While Guardian's assets are not assets of the Plan, Guardian's legal obligation to pay benefits under the Policy is an asset of the Plan; indeed it is the only asset of the Plan. See Trustees of Laborers' Local No. 72 Pension Fund v. Nationwide Life Ins. Co., 783 F.Supp. 899, 910 (D.N.J.1992) (It is well established that an insurance contract issued to a plan is itself an asset of the plan, even if the assets invested with the insurance company are not.). That legal obligation, like all legal obligations, includes consequences for its violation. The consequence of Guardian's noncompliance with the terms of the Policy is that the Plan has a valid right of action against Guardian for the liability the Plan has incurred as a result.
{54} We are not persuaded that it should make any difference whether the benefits from the insurer flow to the Plan or directly to Kirby, the intended beneficiary. Below, Kirby argued by analogy that the Policy was similar to a liability insurance policy, which undoubtedly can be garnished by a judgment creditor. The Court of Appeals rejected this argument, noting a fundamental difference between liability policies and ERISA disability policies. Kirby II, 2008-NMCA-154, ¶ 8, 145 N.M. 264, 196 P.3d 965. The Court went on to explain that, regardless of Guardian's obligation under the Policy, the Policy requires payment of benefits directly to the beneficiaries on behalf of the Plan. Id. ¶ 10. Since the Plan is not entitled to a direct payment under the Policy, the Court of Appeals reasoned, there is nothing to garnish. Id. {55} The problem with the Court of Appeals analysis is that it focuses on the flow of payments under the Policy, instead of focusing on the rights of action that exist for nonpayment. Here, the Plan remains liable to Kirby, notwithstanding Guardian's contractual obligation to pay benefits upon a judicial determination of eligibility. Thus, the Plan's right of action is one resulting from Guardian's breach of the Policy. Instead of focusing on the flow of payments, the Court of Appeals should have focused on the flow of contractual obligations under the Policy, because any garnishable right of action arises out of those obligations. {56} The same analysis applies in every garnishment action. For instance, garnishment of wages by a third party is nothing more than garnishment of the employee's right of action against the employer for payment of these wages under the employment contract. Under a garnishment statute similar to our own, the Colorado Supreme Court observed that [f]uture earnings are contingent because they depend upon future performance. The employee cannot sue his employer for wages due before the employee has fulfilled his employment contract. Olson v. Stone (In re Stone), 194 Colo.394, 573 P.2d 98, 100 (1977) (en banc) (Groves, J., concurring in result, Carrigan, J., not participating). Similarly in the liability insurance context, [4] if a liability insurer does not pay an injured third party in accordance with the terms of its insurance policy with the insured, the third party can obtain a judgment directly against the insured, at which point the insured would have a right of action against his insurer for breach of the policy. The injured third party can garnish that right of action in a suit against the insurer. See 16 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 232:199 (3d ed. 2000) (Distinct from the liability of the insurer on its contract of insurance is the liability which may arise by virtue of its breach of that contract, the insured's claim against the insurer for such breach being subject to attachment.). {57} The default judgment against the Plan was specifically for wrongful denial of benefits, triggering Guardian's obligation to pay benefits under the terms of the Policy. Guardian's continuing refusal to comply with the terms of the Policy is entirely responsible for the Plan's remaining liability to Kirby.

{58} As previously discussed, in order to be garnishable the right of the judgment debtor against the garnishee must be mature, not contingent. Here, there is no future event that could change the terms of the Policy or upset the findings of the default judgment. Indeed, the Court of Appeals prefaced its analysis by stating, The parties do not frame their arguments so as to allege or deny the existence of a genuine issue of material fact; rather, the question presented focuses on the propriety of the district court's application of our garnishment law.... We therefore focus exclusively on ... whether Plaintiff is entitled to a judgment as a matter of law. Kirby II, 2008-NMCA-154, ¶ 7, 145 N.M. 264, 196 P.3d 965. If Guardian is liable to the Plan for breaching the Policy, it is liable immediately. The district court made the determination that Guardian was liable as a matter of law, and we affirm its conclusion. Thus, Guardian's liability to the Plan for breaching the terms of the Policy is currently owing and payable. The only remaining question is whether Guardian's defense of res judicata defeats the Plan's right of action.
{59} Throughout most of this litigation Guardian has proceeded on a central theory that, because it was dismissed from Kirby's initial claim for wrongful denial of benefits, res judicata (claim preclusion) bars any claim for benefits that Kirby may ultimately seek to recover from Guardian. Our Court of Appeals in Kirby II agreed, viewing any attempt to enforce Guardian's obligations under the Policy as an action that Kirby could have originally brought directly against Guardian. 2008-NMCA-154, ¶ 13, 145 N.M. 264, 196 P.3d 965. The Kirby II court found support for this position in New Mexico case law holding that `a dismissal with prejudice is an adjudication on the merits for purposes of res judicata. ' Id. (quoting Hope Cmty. Ditch Ass'n v. N.M. State Eng'r, 2005-NMCA-002, ¶ 10, 136 N.M. 761, 105 P.3d 314) (emphasis added). {60} Both Guardian and the Court of Appeals interpret this proposition of law to mean that Guardian can never be liable for paying a money judgment on Kirby's claim for benefits, because the merits of Kirby's claim have been effectively decided in Guardian's favor. If this were true, it would make discussion of garnishment irrelevant, because Guardian would be shielded from any action that would cause it to pay under the Policy. In our view, however, Guardian misapplies the principles which animate res judicata theory. {61}  Res judicata bars not only claims that were raised in the prior proceeding, but also claims that could have been raised. Bank of Santa Fe v. Marcy Plaza Assocs., 2002-NMCA-014, ¶ 14, 131 N.M. 537, 40 P.3d 442 (2001).  Res judicata precludes a claim when there has been a full and fair opportunity to litigate issues arising out of that claim. Id. (citing Myers v. Olson, 100 N.M. 745, 747, 676 P.2d 822, 824 (1984)). The party asserting res judicata must satisfy the following four requirements: `(1) [t]he parties must be the same, (2) the cause of action must be the same, (3) there must have been a final decision in the first suit, and (4) the first decision must have been on the merits.' City of Sunland Park v. Macias, 2003-NMCA-098, ¶ 18, 134 N.M. 216, 75 P.3d 816 (quoting Bennett v. Kisluk, 112 N.M. 221, 225, 814 P.2d 89, 93 (1991)). Whether the elements of claim preclusion are satisfied is a legal question, which we review de novo. Blea v. Sandoval, 107 N.M. 554, 557, 761 P.2d 432, 435 (Ct.App.1988) (effect of prior judgment is a legal question that does not require a review of the facts). As we discuss below, res judicata is founded on principles of fairness and justice. {62} In the present action, res judicata is not a bar because the two claims against Guardian are not the same and could not have been brought in the same proceeding. Roybal v. Lujan de la Fuente, 2009-NMCA-114, ¶ 25, 147 N.M. 193, 218 P.3d 879 (2009). The initial dismissals of Guardian with prejudice were final and on the merits for res judicata purposes, and Guardian argues that the present action is a collateral attempt by Kirby to recover the same benefits that were disallowed in the earlier litigation. Indeed, Kirby is seeking to recover the same benefits from the Plan that she once sought to recover directly from Guardian. Yet, there is no escaping the fact that the present cause of action against Guardian is for enforcement of a writ of garnishmentnot for wrongful denial of benefits, or insurer bad faith, or any of the other causes of actions precluded by Guardian's initial dismissal. {63} Focusing on the subject matter giving rise to each claim, we conclude that the two claims arose from different transactions. Under Bank of Santa Fe, one factor required for a showing that two claims are the same is the relatedness of the facts in time, space, origin, or motivation. 2002-NMCA-014, ¶ 16, 131 N.M. 537, 40 P.3d 442 (internal quotation marks and citation omitted). Guardian's initial decision to deny benefits was based on its conclusion that Kirby was ineligible under the Policy, and Kirby's initial claims against Guardian (which were ultimately dismissed with prejudice) were motivated by that decision. In contrast, the present garnishment action was motivated by the Plan's failure to satisfy the default judgment award, which, as far as we can surmise from the record, was due to its lack of liquid assets. Thus, the subject matter giving rise to the two actions concern entirely distinct motivations, and are separated by nearly a decade. The garnishment action could not have been brought against Guardian at the same time as the claims that were dismissed, because the Plan was years away from the judgment that would establish its liability to Kirby. See id. ¶ 14. One is not required to join an enforcement claim against a garnishee in the underlying litigation to establish liability. {64} Even if we were to construe the present action as a collateral attempt at redress for wrongful denial of benefits, it would be based on a new transaction: Guardian's breach of the Policy by refusing to pay benefits once the district court determined, by default judgment, that Kirby was disabled. The Kirby-Federal court addressed this very point: At the time the state court determined that [Kirby] was entitled to long-term disability benefits under the Plan, Guardian became aware that [Kirby] was a beneficiary of the Plan and was entitled to recover benefits. Guardian's failure to pay benefits after the state court's determination that [Kirby] was a beneficiary under the terms of the Plan is a new cause of action because Guardian committed a new breach of the terms of the Plan. This new cause of action originated at a different time and based on a new set of facts: that [Kirby] has been judicially determined eligible for benefits and that the Plan and [Guardian] are ignoring the judgment ordering the payment of Plaintiff's benefits. Kirby-Federal, slip op. at 14. We agree with the federal district court's analysis on this point. As such, the present litigation is, for purposes of the same claim requirement of res judicata, twice removed from the judgments that actually have any preclusive effect. {65} Res judicata is a judicial creation ultimately intended to serve the interests of justice. To interpret and enforce our res judicata doctrine as Guardian urges would have the opposite result. In Computer One, Inc. v. Grisham & Lawless P.A., we observed that the underlying purpose of res judicata is to relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, ... prevent[] inconsistent decisions, [and to] encourage reliance on adjudication. 2008-NMSC-038, ¶ 31, 144 N.M. 424, 188 P.3d 1175 (internal quotation marks and citations omitted). Certainly, considerable judicial resources have been devoted to this dispute, and no doubt both sides have incurred substantial expense. Still, the interests of justice are hardly served by using res judicata to render a valid judgment meaninglessand to strip a disabled employee of her entitlement to benefitsespecially where the guidelines for pursuing an ERISA claim can be so obtuse to the average claimant. {66} For as long as Guardian has been asserting res judicata to bar Kirby's recovery, it has referred to its earlier dismissals as judicial determinations on the merits. Although the language of our cases may be read literally to mean that a dismissal with prejudice is  an adjudication on the merits, see Hope Cmty. Ditch Ass'n, 2005-NMCA-002, ¶ 10, 136 N.M. 761, 105 P.3d 314 (emphasis added), such a reading would be a distortion in this case. A dismissal with prejudice is an adjudication on the merits only to the extent that when a claim has been dismissed with prejudice, the fourth element of res judicata (a final valid judgment on the merits) will be presumed so as to bar a subsequent suit against the same defendant by the same plaintiff based on the same transaction. If this were otherwise, plaintiffs could simply ignore dismissals and file the same claim as many times as they wished, so long as the claim never progressed to a determination of the substantive issues. {67} The initial judgments that Guardian claims to have been on the merits did not include a judicial determination of Kirby's eligibility. The only judgment involving the issue of disability was the default judgment in Kirby's favor. Her attempt to enforce that judgment against Guardian, the party who contracted for the very responsibility to make disability payments to employees like Kirby, hardly offends the interests of justice that the doctrine of res judicata was designed to serve. {68} Finally, we acknowledge Guardian's point that garnishment will serve to impose a liability upon Guardian that Kirby could not have secured in a direct action, and that this liability is the result of proceedings to which Guardian was not party. In its brief to the Court of Appeals, Guardian argued that the district court ruling failed to treat it as an innocent third party, and that requiring Guardian to pay the default judgment violated its Due Process rights. However, the innocent third party concept simply means that if the garnishee is ordered to turn over the subject of garnishment, its liability will be no greater to the garnishor than it would otherwise be to the judgment debtor in a direct action. See Jemko, 106 N.M. at 54, 738 P.2d at 927. Our Opinion today has emphatically adhered to this principle. {69} Having made the initial decision (in good faith, we presume) to deny Kirby benefits, we do not fault Guardian for insisting that Kirby satisfy procedural and substantive requirements for a judicial review of that decision. Nevertheless, Guardian was well aware that, following its loss before the Court of Appeals in Kirby I, the district court would adjudicate the substance of Kirby's disability claim, and yet Guardian elected not to participate. Guardian should also have been aware of the possibility that Kirby might ultimately seek to enforce any favorable judgment against Guardian based upon Guardian's commitments under the Policy. See Pecor v. Nw. Nat'l Ins. Co., 869 F.Supp. 651, 653 n. 2 (E.D.Wis.1994) (When [entity] act[ing] in its capacity as plan administrator, it steps into the shoes of the Plan, and is subject to any court orders restraining or directing the Plan's actions.). {70} Although it was not required to attend the proceedings, as fiduciary and insurer Guardian had every incentive to participate in the hearing along with the Plan and justify its decision to deny benefits, especially since its res judicata defense would have had the same force in a subsequent enforcement action, regardless of the outcome. See Rule 1-008(E)(2) NMRA; see also Gregg v. Transp. Workers of Am. Int'l, 343 F.3d 833, 841 (6th Cir.2003) (ERISA fiduciary's duty of loyalty requires it to act as a prudent person, for the exclusive purpose of providing benefits to plan beneficiaries. (Internal quotation marks and citation omitted.)). By not attending, Guardian gave up its opportunity to contest Kirby's eligibility, relying thereafter entirely on res judicata to bar enforcement of the default judgment. {71} Once Kirby secured the writ of garnishment, all due process required was that Guardian be given notice and the opportunity to explain why it should not be held responsible for the default judgment. See Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 94 L.Ed. 865 (1950) (An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.); see also Moya v. DeBaca, 286 F.Supp. 606, 608 (D.N.M.1968) (stating judgment debtor is given notice and hearing at underlying proceeding, garnishee is given notice and hearing at garnishment proceeding). Guardian has had the opportunity to argue its res judicata defenseand has done so vigorouslyin this Court and both courts below. For the reasons previously set forth by the federal district court on this precise issue, as well as those discussed herein, we conclude that Guardian's wholesale reliance on res judicata was misguided.