American General Fire & Casualty Co. v. J.T. Construction Co.

740 P.2d 1179, 106 N.M. 195
CourtNew Mexico Court of Appeals
DecidedJuly 7, 1987
Docket9822, 9830
StatusPublished
Cited by10 cases

This text of 740 P.2d 1179 (American General Fire & Casualty Co. v. J.T. Construction Co.) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American General Fire & Casualty Co. v. J.T. Construction Co., 740 P.2d 1179, 106 N.M. 195 (N.M. Ct. App. 1987).

Opinion

OPINION

MINZNER, Judge.

Plaintiff American General Fire and Casualty Company brought suit against defendants J.T. Construction Company, Inc. and Poison & Grady, Ltd., seeking contribution for compensation paid Arturo Escobar, Jr. See NMSA 1978, § 52-1-56(0 (amended effective December 1,1986; 1986 N.M.Laws ch. 22, § 103). Plaintiff’s suit was brought more than three years after the date Escobar was injured but less than three years after plaintiff settled Escobar’s right to worker’s compensation benefits. Defendants appeal the trial court’s decision that plaintiff’s suit was timely filed. We reverse.

BACKGROUND

Escobar was injured on February 16, 1983, while employed by All Temp Insulation on a construction contract at Holloman Air Force Base. At the time of his injury, his employer was providing his services through a contract with defendant Poison & Grady for the general contractor, defendant J.T. Construction Company.

Plaintiff was the compensation carrier for All Temp Insulation. As a result of the accident, plaintiff entered into a lump sum settlement with Escobar on March 9, 1984, and was paid compensation benefits, medical benefits, and attorney fees. Escobar assigned his claim against defendants to plaintiff “to the extent of their payment,” and he authorized plaintiff to pursue “the above-mentioned claim” as he “might or could do.”

Plaintiff filed its complaint for reimbursement on September 2, 1986, claiming that both defendants negligently failed to inspect the scaffolding from which Escobar fell. Plaintiff also alleged that defendant J.T. Construction Company negligently constructed the scaffolding. Defendants answered, raising the issue that the claim was untimely, and subsequently moved to dismiss.

The trial court ruled that the relevant statute was NMSA 1978, Section 37-1-4-(four-year period), which governs unspecified actions, rather than NMSA 1978, Section 37-1-8 (three-year period), which governs actions for personal injury. The court also ruled that plaintiffs cause of action did not accrue until it had satisfied its obligations to Escobar. Consequently, the court concluded that the complaint was timely under either of the statutes of limitations and denied defendants’ motion, but the court certified its decision for review as an interlocutory appeal. See NMSA 1978, § 39-3-4(A).

Both defendants applied for an order granting an interlocutory appeal. We consolidated the cases and granted the application; the case was assigned to the legal calendar. See SCRA 1986, 12-210(D). The issues certified are (1) whether Section 37-1-8 controls the timeliness of plaintiff’s complaint, and (2) whether plaintiff’s cause of action accrued on the date Escobar was injured or the date plaintiff satisfied its obligations to him. We discuss these issues together because, on these facts, they are related.

DISCUSSION

When a third party’s tortious conduct injures a worker and the injury is covered by worker’s compensation, almost all states preserve a right of action by the employer and its insurer for reimbursement against the third party. See generally 2A A. Larson, The Law of Workmen’s Compensation, § 71.00 (1986). In New Mexico, Escobar’s right of action against the third-party tortfeasors was preserved by Section 52-1-56(C), as it read prior to amendment in 1986. The statute not only preserves the_ right of action against a third party, but it also is intended to prevent double recovery by the worker and to provide reimbursement for employers. Strickland v. Roosevelt County Rural Elec. Coop., 103 N.M. 63, 702 P.2d 1008 (Ct.App.1984); Garcia v. Middle Rio Grande Conservancy Disk, 99 N.M. 802, 664 P.2d 1000 (Ct.App.1983). Our statute appears to follow the typical pattern, 2A A. Larson, supra, at Section 71.21, although the methods of providing for reimbursement to the employer or insurance carrier vary among the states. See id. at § 74.00.

Under our cases, Section 52-l-56(C) has been construed to provide only a single cause of action. See Reed v. Styron, 69 N.M. 262, 365 P.2d 912 (1961). The worker may sue a third party wrongdoer for the entire amount of damages, and the employer or insurer is entitled to reimbursement from the proceeds. Security Ins. Co. v. Chapman, 88 N.M. 292, 540 P.2d 222 (1975). The supreme court has observed that the statute provides a right of reimbursement which is distinct from the equitable doctrine of subrogation. See Royal Indem. Co. v. Southern Cal. Petroleum Corp., 67 N.M. 137, 353 P.2d 358 (1960). The claim for reimbursement has been analyzed as a cause of action against the claimant who has recovered from the third party. See Transport Indem. Co. v. Garcia, 89 N.M. 342, 552 P.2d 473 (Ct.App.1976). Nevertheless, in the case before us, plaintiff received an assignment of, and its complaint relies on, the worker’s cause of action for negligence. See Seaboard Fire & Marine Ins. Co. v. Kurth, 96 N.M. 631, 633 P.2d 1229 (Ct.App.1980).

The dispositive appellate issue is whether defendants were entitled to rely on the limitations period provided by Section 37-1-8 for personal injuries. We conclude that they were. See, e.g., Providence Wash. Ins. Co. v. DeHavilland Aircraft Co., 699 P.2d 355 (Alaska 1985); Deculus v. Augenstein Constr. Co., 425 So.2d 315 (La.App.1982). See generally 2A A. Larson, supra, at § 75.00.

We recognize, as plaintiff contends, that the cases employing this analysis have not addressed the particular issue before us in this case, and that the issue is one of first impression. However, our cases interpreting the statute appear to have had as an objective the goal of reducing the likelihood that a third party will be forced to defend more than one action. See Seaboard Fire & Marine Ins. Co. v. Kurth. The result we reach advances this objective. See County of San Diego v. Sanfax Corp., 19 Cal.3d 862, 140 Cal.Rptr. 638, 568 P.2d 363 (1977) (In Bank). That result is consistent with the most recent supreme court precedent, see Taylor v. Delgarno Transp., Inc., 100 N.M. 138, 667 P.2d 445 (1983), as well as the older tradition. See Royal Indem. Co. v. Southern Cal. Petroleum Corp. It is also consistent with the terms of Section 52-l-56(C), which refers to the worker’s cause of action for injuries or death upon receipt of compensation. See Continental Casualty Co. v. Wueschinski, 95 N.M. 733, 625 P.2d 1250 (Ct.App.1981).

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Bluebook (online)
740 P.2d 1179, 106 N.M. 195, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-general-fire-casualty-co-v-jt-construction-co-nmctapp-1987.