Court Opinion

ID: 9564870
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:10:23.576292+00
Date Added: 2024-06-11T09:19:12.384404
License: Public Domain

SCARBOROUGH, Chief Justice, dissenting. It is unfortunate that Mr. Rojo died before the lump sum settlement agreement was approved by the hearing officer as required by NMSA 1978, § 52-5-14(B) (Repl.Pamp.1987). However, unlike the compromise of a disputed claim for permanent disability in Esquibel v. Brown Construction Co., 85 N.M. 487, 513 P.2d 1269 (Ct.App.1973) cited by the majority, Mr. Rojo sought to exchange his undisputed right to periodic disability payments for a lump sum payment from his employer. This is not merely a matter of negotiation and contract between the parties. Under Section 52-5-14(A) the hearing officer, pri- or to approving a lump sum payment and release from further liability, must find that the agreement is fair, equitable and otherwise consistent with provisions of the Workers’ Compensation Act. The Workers’ Compensation Act disfavors lump sum payments. The Act provides that “It is the stated policy for the administration of the Workers’ Compensation Act * * * that it is in the best interest of the injured worker that he receive benefit payments on a periodic basis.” NMSA 1978, § 52-5-12(A) (Repl.Pamp.1987). Section 52-5-14(B) only allows for periodic compensation payments to be converted to “lump sum settlement by agreement of the parties after having been approved by the hearing officer.” NMSA, 1978, § 52-5-14(B) (Repl.Pamp. 1987) (emphasis added). I would hold that as a matter of law the approval of the agreement by the hearing officer is a condition precedent to the very existence of a binding agreement between parties negotiating lump sum payment of workers’ compensation benefits. Court custom and practice has consistently been that these settlement agreements are not final until after court approval. Prior to obtaining that approval both parties should be able to rescind a proposed agreement at any time. The policy disfavoring lump sum payments supports this position. However, even taking the contracts approach of the majority, where the approval of the hearing officer might be deemed a mere condition precedent to execution of the agreement, I cannot agree with the majority opinion. The majority rely on a prior oral agreement between Western and Rojo in order to establish a binding settlement agreement. Whether or not parties to an oral agreement intend to be bound to that agreement prior to execution of a contemplated formal writing is a question of fact which depends on the circumstances of the case. Stites v. Yelverton, 60 N.M. 190, 289 P.2d 628 (1955). Such a factual determination was not part of the findings of the hearing officer. If, to the contrary, Western and Rojo intended not to be bound by their oral agreement until after the execution of a formal document, there was no contract between them “until its execution by both parties.” 1 A. Corbin, Corbin on Contracts § 30 (1963 & Supp.1980). The formal document prepared in this case, a joint petition to enter into a lump sum payment agreement, actually was signed by both parties. However, Mr. Rojo died prior to the time Western’s representative signed the petition. In my opinion, the intervention of Mr. Rojo’s death precluded formation of a contract. The situation is analogous to the supervening death of an offer- or; no contract can be formed because the death of the offeror terminates the offeree’s power of acceptance even though he had no knowledge of the death. 1 A. Corbin, Corbin on Contracts § 48 (1963 & Supp.1980); Restatement (Second) of Contracts § 54 (1981). I would affirm the decision of the court of appeals. For these reasons, I dissent.