DICKSON V. MOUNTAIN STATES MUT. CAS. CO., 1982-NMSC-090, 98 N.M. 479, 650 P.2d
1 (S. Ct. 1982)
FRANCES G. DICKSON, Plaintiff-Appellant,
vs.
MOUNTAIN STATES MUTUAL CASUALTY COMPANY,
Defendant-Appellee.
SUPREME COURT OF NEW MEXICO
1982-NMSC-090, 98 N.M. 479, 650 P.2d 1
APPEAL FROM THE DISTRICT COURT OF
BERNALILLO COUNTY, Harry E. Stowers, Jr., District Judge
MARCHIONDO & BERRY, CHARLES G. BERRY,
MICHAEL VIGIL, Albuquerque, New Mexico, Attorneys for Appellant.
MODRALL, SPERLING, ROEHL, HARRIS &
SISK, DOUGLAS R. VADNAIS, THOMAS JOHNSON, Albuquerque, New Mexico, Attorneys
for Appellee.
Riordan, J., wrote the opinion. WE CONCUR:
DAN SOSA, JR., Senior Justice, WILLIAM FEDERICI, Justice.
{1} This is an appeal from
the District Court of Bernalillo County. Frances G. Dickson (appellant) sought
damages from her employer's workmen's compensation carrier, Mountain States
Mutual Casualty Company (appellee), for bad faith refusal to pay
hospitalization and medical expenses to which appellant claimed she was
entitled pursuant to the insurance policy issued to appellant's employer. The
district court granted appellee's motion to dismiss for failure to state a
claim upon which relief may be granted. This appeal followed. We affirm.
{2} As a result of an
on-the-job accident while working for Bob Farley Music Center, appellant became
totally disabled. Since the accident, appellee paid appellant some biweekly
compensation disability benefits and honored some related medical expenses.
However, appellee refused to pay $4,002.68 of appellant's medical expenses.
Appellant claims that appellee's refusal to pay those medical expenses amounts
to a willful and wanton disregard of its obligation to deal in good faith under
the terms of the insurance policy. Appellant contends that the failure of
appellee to pay has resulted in emotional distress and mental anguish to
appellant and that appellant is entitled to file an independent action for
compensatory and punitive damages because of appellee's refusal to pay.
{3} The issue presented in
this appeal is whether the Workmen's Compensation Act, Section 52-1-1 through
52-1-69, N.M.S.A. 1978 (Cum. Supp. 1981), provides an exclusive remedy, or
whether an injured employee who is receiving workmen's compensation benefits
and medical expenses from his employer or his insurer has a cause of action
against the employer's insurer for refusal of the insurer to pay some of the
medical expenses which the employee claims are owing. We hold that the New
Mexico Workmen's Compensation Act provides the exclusive remedy under the
particular facts in this case.
{4} The New Mexico Workmen's
Compensation Act expressly makes the remedies provided by the Act the sole and
exclusive remedies available to an employee for claims against his employer or
insurer.
{5} Section 52-1-9 states, in
pertinent part:
{*480} The right to
compensation provided for in this act [52-1-1 to 52-1-69 NMSA 1978], in lieu
of any other liability whatsoever, to any and all persons whomsoever, for
any personal injury accidentally sustained or death resulting therefrom, shall
obtain in all cases.... (Emphasis added.)
{6} Section 52-1-8 states, in
pertinent part, that:
Any employer who has complied with the provisions of the
Workmen's Compensation Act [52-1-1 to 52-1-69, NMSA 1978] relating to
insurance,... shall not be subject to any other liability whatsoever for
the death of or personal injury to any employee, except as provided in the
Workmen's Compensation Act, and all causes of action, actions at law, suits
in equity and proceedings whatever, and all statutory and common-law rights and
remedies for and on account of such death of, or personal injury to, any such
employee... are hereby abolished except as provided by the Workmen's
Compensation Act. (Emphasis added.)
{7} Section 52-1-6(D)
restates the exclusivity of compensation benefits in a slightly different
manner:
Nothing in the Workmen's Compensation Act, however, shall
affect, or be construed to affect, in any way, the existence of, or the mode of
trial of, any claim or cause of action which the workman has against any person
other than his employer, or another employee of his employer, including
a management or supervisory employee, or the insurer, guarantor or surety of
his employer. (Emphasis added.)
{8} The exclusivity provided
for by the New Mexico Workmen's Compensation Act is the product of a
legislative balancing of the employer's assumption of liability without fault with
the compensation benefits to the employee:
[W]orkman's compensation... affords the exclusive remedy for
the injury by the employee or his dependents against the employer and insurance
carrier. This is part of the quid pro quo in which the sacrifices and
gains of employees and employers are to some extent put in balance, for, while
the employer assumes a new liability without fault, he is relieved of the
prospect of large damage verdicts.
Mountain States Tel. & Tel. Co. v. Montoya, 91
N.M. 788, 791, 581 P.2d 1283, 1286 (1978) (quoting with approval from 2A
A. Larson, The Law of Workmen's Compensation Law Section 65.10 at 12-1 to 12-4
(1976).
{9} This legislative
balancing reflects the recognized public policy supporting this exclusivity:
Concerning the public policy in limiting the employer's
liability, [citation omitted]:
The basis upon which the Workmen's Compensation Law rests is
that it imposes upon the employer an absolute, though limited, liability, not
based upon the principle of tort but upon compensation to the injured employee
regardless of fault * * in exchange for a release from the unlimited liability
to which he was theretofore subject upon the theory of negligence.
{10} Although New Mexico
state courts have not addressed the propriety of tort actions seeking damages
for denial or termination of medical or compensation benefits, both the United
States District Court for the District of New Mexico and the Tenth Circuit
Court of Appeals, each applying New Mexico law, have addressed this precise
issue. In two separate New Mexico cases the federal district courts, and later
the Court of Appeals, held that the New Mexico Workmen's Compensation Act barred
such actions, regardless of whether the denial or termination was in bad faith.
Chavez v. Kennecott Copper Corp., 547 F.2d 541 (10th Cir. 1977);
Escobedo
v. American Employers Ins. Co., 547 F.2d 544 (10th Cir. 1977).
{11} In
Chavez, the
plaintiff alleged bad faith denial of compensation benefits. He argued that
such a denial was intentional tortious conduct and that the proper remedy was a
suit for deceit, bad faith, and intentional infliction of emotional distress.
The Tenth Circuit affirmed a summary
{*481} judgment
against the plaintiff, and noted that the Act clearly contemplated that claims
might be denied, in which case an employee has recourse to the state courts:
The Act clearly contemplates that an employer may deny a
workmen's claim for compensation benefits, but if he does, the Act provides the
workman with a remedy. The remedy is the same whether the denial is made in
good faith or bad faith. In either case, the Act gives the workman the right to
file his claim with the states district court and have the court adjudicate it.
By the terms of the Act, this is the exclusive remedy for the denial of a
claim for compensation.
Id. 547 F.2d at 543 (emphasis added.)
{12} General exclusivity of
the New Mexico Workmen's Compensation Act has been litigated in this State. The
decisions have uniformly held that the employer or insurer's liability is
limited to that set forth in the Act. This Court addressed the issue of
exclusivity in
Galles Chevrolet Company v. Chaney, 92 N.M. 618,
593 P.2d
59 (1979). In affirming the trial court's summary judgment against an employee
bringing an action outside the compensation act to recover damages, this Court
held that since the Workmen's Compensation law has provided a remedy,
"that law is exclusive."
Id. at 620, 593 P.2d at 61.
{13} In
Mountain States
Tel. & Tel. Co. v. Montoya, supra, this Court barred an employee from
maintaining a tort claim for damages.
Once a workman's compensation act has become applicable
either through compulsion or election, it affords the exclusive remedy for the
injury by the employee or his dependents against the employer and insurance
carrier.
Id. 91 N.M. at 791, 581 P.2d at 1286, (quoting
Larson, supra).
{14} This Court has expressly
stated that if the compensation act provides a remedy for the alleged wrong,
then that remedy is exclusive. Here, the alleged wrong is the refusal to pay a
medical bill. The compensation act clearly provides a remedy. As noted in
Chavez
and in
Escobedo, a plaintiff need only file a complaint in state court
to compel payment of any benefits to which she may be entitled. A defendant's
responsibility to pay, if it is in fact responsible, exists solely by virtue of
the Workmen's Compensation Act. The Act itself provides the benefits and the remedies
for any failure to pay. Thus, plaintiff is bound to follow the procedures set
forth in the Act to redress the insurer's alleged wrong.
See also Gallegos
v. Chastain, 95 N.M. 551,
624 P.2d 60 (Ct. App. 1981).
{15} The trial court is
affirmed.
WE CONCUR: DAN SOSA, JR., Senior Justice, WILLIAM FEDERICI,
Justice.