This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The claimant, a carpenter, was injured on May 11, 1987, when a scaffolding broke and struck him, causing a cervical strain, mild cervical root compression, and disabling neck pain. The employer's insurer initially paid workers' compensation benefits but terminated them on December 14, 1987, citing the claimant's alleged failure to follow medical recommendations. The claimant sought alternative medical opinions and treatments, which were found to be reasonable and necessary for his injury.
Procedural History
- Hearing Officer: Found that the insurer acted in bad faith by unilaterally terminating benefits without a reasonable basis and awarded $10,000 in attorney fees to the claimant.
- Court of Appeals: Reversed the hearing officer's findings on bad faith and attorney fees, holding that the bad faith determination was unsupported by substantial evidence.
Parties' Submissions
- Claimant: Argued that the insurer acted in bad faith by terminating benefits without a reasonable basis, disregarding his rights, and causing economic loss. He contended that he sought necessary medical care and requested a second opinion for a recommended myelogram and possible surgery, which the insurer unreasonably denied.
- Insurer: Asserted that the termination of benefits was justified due to the claimant's failure to follow medical recommendations, including physical therapy, medication, and a myelogram. It argued that there was no bad faith in its handling of the claim.
Legal Issues
- Did the insurer act in bad faith in terminating the claimant's workers' compensation benefits?
- Was the award of $10,000 in attorney fees to the claimant justified under the Workers' Compensation Act?
Disposition
- The Supreme Court of New Mexico reversed the Court of Appeals' decision and reinstated the hearing officer's findings of bad faith and the award of $10,000 in attorney fees.
- The Court also awarded the claimant $1,000 in attorney fees for the proceedings before the Supreme Court.
Reasons
Per Sosa CJ (Ransom, Baca, Montgomery, and Franchini JJ. concurring):
The Court held that substantial evidence supported the hearing officer's finding of bad faith. The insurer's unilateral termination of benefits, particularly in response to the claimant's reasonable request for a second medical opinion regarding a high-risk procedure, demonstrated reckless disregard for the claimant's rights under the Workers' Compensation Act. The Court emphasized that under the whole record standard of review, all evidence must be considered, and the hearing officer's findings should be upheld if supported by substantial evidence. The insurer's conduct met the statutory definition of bad faith, as it involved willful or reckless disregard of the claimant's rights. Accordingly, the award of attorney fees was justified under Section 52-1-54(C)(2) of the Act.