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 case arose from an incident on June 3, 1987, when the Petitioner, a security guard employed by the Respondent, was attacked and severely injured while performing her duties at a vocational school. She received workers' compensation benefits from the Respondent's insurer but later pursued a third-party claim against the school, settling for $7,500. Following the settlement, the Respondent terminated her workers' compensation benefits, prompting the Petitioner to seek reinstatement (paras 2-3).
Procedural History
- Workers' Compensation Judge: Denied the Petitioner's claim for reinstatement of workers' compensation benefits, citing the rule in Castro v. Bass and Section 52-5-17 (para 3).
- Court of Appeals: Affirmed the Workers' Compensation Judge's decision, relying on the precedent set in Castro v. Bass (para 1).
Parties' Submissions
- Petitioner: Argued that the rule in Castro v. Bass, which bars workers from receiving compensation after settling a third-party claim, should be reconsidered in light of comparative negligence principles. She contended that the settlement did not make her financially whole and that the employer's reimbursement rights were not compromised (paras 4, 12-13).
- Respondents: Maintained that the Petitioner's claim for workers' compensation benefits was barred under the rule in Castro v. Bass and Section 52-5-17, which prohibits double recovery (para 3).
Legal Issues
- Does the satisfaction of a third-party claim extinguish a worker's right to workers' compensation benefits under Section 52-5-17?
- Should the rule in Castro v. Bass be reconsidered in light of comparative negligence principles?
Disposition
- The Supreme Court of New Mexico reversed the Court of Appeals' decision and remanded the case to the Workers' Compensation Judge for further proceedings consistent with its opinion (paras 1, 17-18).
Reasons
Per Ransom CJ (Baca and Franchini JJ. concurring):
The Court overruled the rule in Castro v. Bass and its progeny, finding it inconsistent with the equitable principles underlying Section 52-5-17. The Court held that the statute does not require an election of remedies but instead aims to prevent double recovery through statutory assignment and reimbursement mechanisms. It rejected the presumption that a third-party settlement necessarily makes a worker financially whole, emphasizing that the focus should be on whether the employer's reimbursement rights are compromised (paras 13-14).
The Court also noted that the adoption of comparative negligence principles in New Mexico undermines the rationale for the Castro rule, as a worker's recovery from a third party may not fully compensate for their injuries. The burden lies with the worker to demonstrate that the third-party settlement does not fully discharge the employer's liability. If contested, the Workers' Compensation Judge must determine the fairness of the settlement and the employer's entitlement to reimbursement or credit (paras 15-16).