Romero v. Earl

810 P.2d 808, 111 N.M. 789
CourtNew Mexico Supreme Court
DecidedMay 1, 1991
Docket18952
StatusPublished
Cited by36 cases

This text of 810 P.2d 808 (Romero v. Earl) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Romero v. Earl, 810 P.2d 808, 111 N.M. 789 (N.M. 1991).

Opinion

OPINION

RANSOM, Justice.

Dr. Charles Romero, a chiropractor, sued attorney Richard Earl in metropolitan court for $2,339.82 pursuant to a “Doctor’s Lien” against settlement proceeds in a worker’s compensation case. The instrument sued upon, signed by the worker, Jesus Rascón, and his attorney, Earl, authorized Romero to release to Earl medical information on Rasón’s condition and directed Earl to pay from proceeds of the lawsuit directly to Romero whatever sums may be due and owing him for medical services rendered by reason of the accident. When Earl later received $5,000 in settlement proceeds, he paid the entire sum directly to Rasón upon the latter’s instructions.

In response to Romero’s complaint, Earl answered and asserted two affirmative defenses: (1) The contract sued upon was void for lack of consideration, and (2) the lien was illegal. The metropolitan court entered an order granting summary judgment in favor of Earl, and Romero appealed to the district court. On the record for review the district court reversed the decision of the metropolitan court and remanded the case for a hearing on its merits. Earl appeals, raising anew his affirmative defenses.

Obligor’s duty to assignee. We agree with Romero that by virtue of the Doctor’s Lien, 1 Earl became obligated to distribute the proceeds of Rascón’s claim in accordance with the writing, and that duty gave rise to an enforceable right in favor of Romero.

The writing was an assignment to Romero of Rascón’s right to the proceeds of the award. 2 See S & W Trucks, Inc. v. Nelson Auction Serv., Inc., 80 N.M. 423, 457 P.2d 220 (Ct.App.1969) (language of assignment need not be formal, rather it need only manifest an intention on part of owner to transfer a right or interest in property); 4 A. Corbin, Corbin on Contracts § 879 (1951) (same). Earl, as obligor 3 with notice of the assignment, was required to pay the assignee. Id. § 890. The obligor is liable to the assignee if the funds assigned subsequently are paid to the assignor in violation of the assignment. Bonanza Motors, Inc. v. Webb, 104 Idaho 234, 236, 657 P.2d 1102, 1104 (Ct.App.1983).

Rascón’s purported unilateral revocation of the assignment did not discharge Earl’s duty. As ably argued by Romero in his answer brief, once an attorney has accepted from his client an assignment of settlement proceeds to the client’s creditor, the client, as assignor, cannot cancel or modify the assignment by unilateral action without the assent of the assignee, nor may he defeat the rights of the assignee. See Martinez v. Martinez, 98 N.M. 535, 538, 650 P.2d 819, 822 (1982) (assignment of rights to child support); Bonanza Motors, 104 Idaho at 236, 657 P.2d at 1104 (partial assignment of interest in funds to be received from a lawsuit against insurance company). Under such circumstances, a lawyer is not ethically bound to give the client more than the sum to which the client is entitled, nor is the client entitled to receive the funds promised to the creditor. Id.

Adequacy of consideration. Earl contends that his obligation to Romero was unsupported by consideration. 4 Consideration adequate to support a promise is essential to enforcement of the contract and must be bargained for by the parties. Knoebel v. Chief Pontiac, 61 N.M. 53, 57, 294 P.2d 625, 627-28 (1956). Something is bargained for “if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise.” Restatement (Second) of Contracts § 71 (1979); see also Restatement (Second) of Contracts § 79 (1979) (if the requirement of bargained for consideration is met, there is no further requirement of a benefit to the promisor or a detriment to the promisee).

We note that this is not a case in which an attorney is expressly or impliedly liable for the unpaid fees of consultants or other experts the attorney has retained on behalf of the client. Here, Romero was paid $732.83 for the preparation and giving of his deposition, and an additional $629.28 as his fee at trial. He also was paid $8.50 toward a total of $11.00 for providing copies of charts. His claim for $2,339.82 does not purport to include litigation-related fees, other than treatment of Rascón’s injuries.

In response to Earl’s motion for summary judgment in the metropolitan court, Romero filed an affidavit stating that consideration for the Doctor’s Lien included his assurances that Rascón would continue to receive medical treatment, that Earl would receive current and reliable information on Rascón’s medical status, and that Romero would be available as a consultant and witness in aid of Rascón’s claim. Further, Romero argues that forbearance from collecting fees for treating Rascón constituted consideration. Based solely on that affidavit, we think Romero has raised material questions of fact concerning the consideration for the assignment by Rascón.

In addition, Romero has tendered sufficient evidence that, under the law of contracts and the acceptance of an assignment, there were at the very least genuine issues of materia] fact regarding the intent of the parties and the essential terms of the agreement.

Illegality. A more novel issue is presented by the illegality defense. The Workers’ Compensation Act applicable here included a provision that:

Compensation benefits shall be exempt from claims of creditors and from any attachment, garnishment or execution and shall be paid only to such workman or his personal representative or such other persons as the court may, under the terms hereof, appoint to receive or collect compensation benefits.

NMSA 1978, § 52-l-52(A) (Repl.Pamp. 1987) (amended 1989).

We believe that a meritorious claim of illegality may be raised by a worker with respect to the settlement proceeds of the worker’s compensation claim in the event his or her attorney should withhold for medical providers any sums not received by the attorney for that specific purpose. Such a claim also may be raised should a medical provider seek to attach, garnish, or execute on settlement proceeds that do not include a specific sum to be paid the medical provider. In the instant case, however, the medical provider is not simply pursuing the compensation benefits to collect a medical bill. He has sued the attorney on the latter’s signature to Rascón’s assignment, by which both agreed to the payment from proceeds of the lawsuit directly to Romero of whatever sums may be due and owing him for medical services. The rights of the assignee otherwise having attached as discussed above, the question becomes whether the assignor may defeat those rights by unilaterally canceling the assignment in reliance upon the exemption of Section 52-1-52(A). We think not.

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Cite This Page — Counsel Stack

Bluebook (online)
810 P.2d 808, 111 N.M. 789, Counsel Stack Legal Research, https://law.counselstack.com/opinion/romero-v-earl-nm-1991.