Court Opinion

ID: 9601923
Source: CourtListenerOpinion
Date Created: 2023-08-22 01:50:44.104198+00
Date Added: 2024-06-11T18:01:59.986436
License: Public Domain

SUTIN, Judge (specially concurring). A. The dismissal of Higgins’ claim is not an issue in this appeal. Plaintiffs’ first point is directed to the issue that the trial court erred in dismissing Higgins’ claim for damages against defendant. Reliance is had on Rule 15(c) of the Rules of Civil Procedure. This rule allows an amended pleading of a claim to relate back to the date of the original pleading. Plaintiff claims, therefore, that the Higgins’ claim, pleaded as a second cause of action in an amended claim by Seaboard and Higgins, related back to the original pleading and therefore defeated the statute of limitations. The accident occurred January 81, 1975. The original claim was filed January 19, 1978, some 12 days before the limitation period for negligence cases had run. Seaboard and Higgins were party plaintiffs. The complaint stated a claim for both Seaboard and Higgins, except that no damages for personal injury of Higgins had been alleged. The amended claim in two counts was filed July 6, 1978. The record does not disclose the reason an amended claim was filed. Instead of filing an amended complaint, plaintiff should have requested permission of the court to insert an allegation in the original complaint showing damages suffered by Higgins for personal injuries. One of defendant’s affirmative defenses, with reference to Higgins’ cause of action stated that “The Complaint is barred by the Statute of Limitations.” A motion to dismiss was filed July 7, and on September 7, 1978, an Order of Dismissal with prejudice was entered. This Order was erroneous under Rule 15(c). Unfortunately, plaintiff did not appeal from this Order. The dismissal of Higgins’ cause of action is not an issue in this appeal. B. Summary judgment for defendant was erroneous. Summary judgment was granted defendant as a matter of law, not fact. The court found that Seaboard paid workmen’s compensation benefits to Higgins and joined Higgins in a suit to recover those benefits; that Higgins was dismissed as a party plaintiff; that the written assignment Higgins gave Seaboard, in the absence of Higgins as a party plaintiff, was of no force and effect, and Seaboard had no right or cause of action against defendant. Based upon these findings, the court ordered that summary judgment be entered in favor of defendant. The Order was, in effect, one that sustained a motion to dismiss for failure of the pleading to state a claim upon which relief can be granted, or judgment on the pleadings. Rule 12(b)(6), (c), Rules of Civil Procedure. A motion to dismiss for failure to state a claim is granted infrequently. It should not be done unless it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief. On appeal, our inquiry is essentially limited to the contents of the complaint and exhibits attached thereto to determine whether, in the light most favorable to the plaintiffs, and with every doubt resolved in their behalf, the complaint states a valid claim for relief. McCasland v. Prather, 92 N.M. 192, 585 P.2d 336 (Ct.App.1978). Plaintiffs’ first cause of action alleges that Seaboard “insured the employees of Underwriters Adjusting Company, Albuquerque, New Mexico for workmen’s compensation insurance providing their employees benefits of the Workmen’s Compensation Statutes of the State of New Mexico.” Exhibit “A” attached to the complaint is entitled Final Compensation Settlement Receipt, signed by Higgins. It states on January 31, 1975, the date of the accident, Higgins was employed by The Continental Insurance Company and that he was a resident of El Paso, Texas. It was witnessed by Irene Duran of El Paso, Texas. Exhibit “B” attached to the complaint is a “Subrogation Receipt” executed by Higgins and witnessed by Irene Duran. Both instruments appear to be forms used in Texas in workmen’s compensation cases. We have no knowledge whether the compensation settlement was effected under the Texas compensation law or that of New Mexico. If it is proven to be a Texas settlement under Texas law, the Texas compensation statute is applicable. Argonaut Insurance Co. v. Panhandle & Sante Fe R. Co., 367 F.2d 564 (1966). Article 8307, § 6a of the Texas Workmen’s Compensation Law reads in pertinent part: * * * If compensation be claimed under this law by the injured employee * * * then the association shall be subrogated to the rights of the injured employee, and may enforce in the name of the injured employee * * * the liability of said other person * * *. In Texas, the right of subrogation will not mature until payment or assumption thereof has occurred. Reliance Ins. Co. v. Kronzer, Abraham, Etc., 582 S.W.2d 170 (Tex.Civ.App.1979). It was erroneous to enter summary judgment before a determination was made of the state under whose statute compensation benefits were actually paid Higgins. If the compensation was paid, the settlement executed, and the Subrogation Receipt given, under the New Mexico Compensation Act, Seaboard is entitled to proceed in subrogation. Higgins was not dismissed out as a party plaintiff in the first cause of action. Seaboard and Higgins proceeded together to establish Seaboard’s claim. It alleged that “By statute * * * Seaboard * * * has an assignment from Joseph Higgins for all benefits paid to him Section 52-l-56(C), N.M.S.A. 1978 provides in pertinent part, that: * * * the receipt of compensation from the employer shall operate as an assignment to the employer, his or its insurer * * * of any cause of action, to the extent of payment by the employer to the workman * * * which the workman * * may have against any other party for the injuries * * *. This statute makes an assignment for an employee who receives compensation. It also allows a workman a cause of action against a third party for injuries and allows an insurer to have such cause of action for compensation benefits paid the workman by way of partial assignment. Courts of equity will protect the assignee under such partial assignments whenever they can do so without working a hardship, such as double liability, upon the third party who is allegedly liable to the workman. The insurer is the “real party in interest” and is entitled to sue on such assignment in its own name, even if the assignment was of only part of the claim. The above statute is a “reimbursement” statute when the workman sues a third party and recovers. The employer who has paid compensation to the workman has a right to share in the proceeds. It is not a “reimbursement” statute when the insurer has sued on the cause of action and recovered judgment. When this judgment is obtained, the workman’s cause of action against a third party is not extinguished due to a pro tanto assignment. Kandelin v. Lee Moor Contracting Co., 37 N.M. 479, 24 P.2d 731 (1933). Unfortunately, Kandelin has been misinterpreted. The above statute is not solely a “reimbursement” statute nor one cause of action as stated in Herrera v. Springer Corporation, 85 N.M. 6, 508 P.2d 1303 (Ct.App. 1973), reversed on other grounds, 85 N.M. 201, 510 P.2d 1072 (1973), and followed in Transport Indemnity Company v. Garcia, 89 N.M. 342, 552 P.2d 473 (Ct.App.1976). This mistake originated in Royal Indem. Co. v. Southern Cal. Petroleum Corp., 67 N.M. 137, 144, 353 P.2d 358 (1960) in which the court said: We have held this to be a reimbursement statute and that there is but a single cause of action in the employee, even though a part of the recovery is to be paid to the employer or his insurer. Kandelin * * * [supra]. [Emphasis added.] This statement was carried forward in Varney v. Taylor, 71 N.M. 444, 379 P.2d 84 (1963) and Security Insurance Co. of Hartford v. Chapman, 88 N.M. 292, 540 P.2d 222 (1975). Kandelin said: Questions of whether a cause of action in tort is assignable * * * rules against splitting causes of action, yield to the provisions of our Workmen’s Compensation Act. * * * “An insurance company receiving an assignment * * * was the ‘real party in interest’ within Comp. Laws 1907, § 2902, so as to entitle it to sue on such assignment in its own name, even if the assignment was of only a part of the claim.” ****** It seems to us also that the assignment pro tanto of the employee’s cause of action against a third person responsible for his injuries has not been extinguished merely because the employer has sued on the cause of action and recovered judgment * * *. [Emphasis added.] [37 N.M. 488-89, 24 P.2d 731.] We should return to Kandelin. The pro tanto assignment by the workman to the insurer granted the insurer the right to institute proceedings for the recovery of such damages or to compromise with the third party tort-feasor. If not, the legislature should “spell out” with particularity the substantive rights of all parties, this being a legislative rather than a judicial function. Just prior to Kandelin, Aetna L. Ins. Co. v. Moses, 287 U.S. 530, 53 S.Ct. 231, 77 L.Ed. 477 (1933), 88 A.L.R. 647, 651 (1934) said: In the case where the employee survives and accepts compensation as the only person entitled, it is clear that the statutory assignment vests in the employer the full right to recover damages from the third person. Double recovery by the employee * * * is thus avoided. Yet the employer is permitted to share in the recovery only to the extent of his own liability * * * and any excess goes to the injured employee. The insurer succeeded to that right by subrogation. As long as the third party tort-feasor is not burdened with double recovery, the assignment provision should be liberally construed to make it effective. “Subrogation * * * is an equitable remedy. * * * In its normal sense ... it gives the payor a right to collect what is has paid from the party who caused the damage.” White v. Sutherland, 92 N.M. 187, 190, 585 P.2d 331 (Ct.App.1978). “Subrogation is a remedy which courts of equity employ to prevent unjust enrichment. It is said to be based on principles of ‘natural justice’ and is not applied if it would work injustice, [citation omitted] Neither is it employed to relieve a party of the consequences of wrongdoing in which it participated.” Associated Indem. Co. v. Hartford Acc. & Indem. Co., 524 S.W.2d 373, 376 (Tex.Civ.App. 1975). The Workmen’s Compensation Act was not passed for the benefit of a third party tort-feasor. Except by judicial construction, the Act does not deny a workman or an insurer an independent claim, nor cause either to lose this right. In equity and good conscience, the insurer, by way of subrogation, should be assigned rights and remedies that the workman had. State Farm Mut. Auto. Ins. Co. v. Foundation R. Ins. Co., 78 N.M. 359, 431 P.2d 737 (1967). In addition, there is another factor that strongly supports Seaboard’s position. Higgins executed a “Subrogation Receipt” in which he subrogated the insurer and authorized the insurer to sue any person liable for the loss in Higgins’ name or otherwise. In common parlance, “or otherwise” means “in any other way.” State v. Miller-Wohl Co., 3 Terry 73, 28 A.2d 148 (Super.Ct.1942). Although this is, in effect, what the statute allows, it establishes that the presence of Higgins as a party to the suit is not essential. Such a grant of subrogation is not prohibited by the Workmen’s Compensation Act. Defendant is subject only to the claim of Seaboard. To deny this claim would arouse “The Sense of Injustice.”