A. The right of any worker or, in case of his death, of those entitled to receive payment or damages for injuries or disablement occasioned to him by the negligence or wrong of any person other than the employer or any other employee of the employer, including a management or supervisory employee, shall not be affected by the Workers' Compensation Act [Chapter 52, Article 1 NMSA 1978] or the New Mexico Occupational Disease Disablement Law [52-3-1 NMSA 1978], but the claimant shall not be allowed to receive payment or recover damages for those injuries or disablement and also claim compensation from the employer, except as provided in Subsection C of this section.

B. In a circumstance covered by Subsection A of this section, the receipt of compensation from the employer shall operate as an assignment to the employer or his insurer, guarantor or surety of any cause of action, to the extent of payment by the employer to or on behalf of the worker for compensation or any other benefits to which the worker was entitled under the Workers' Compensation Act or the New Mexico Occupational Disease Disablement Law and that were occasioned by the injury or disablement, that the worker or his legal representative or others may have against any other party for the injury or disablement.

C. The worker or his legal representative may retain any compensation due under the uninsured motorist coverage provided in Section 66-5-301 NMSA 1978 if the worker paid the premium for that coverage. If the employer paid the premium, the worker or his legal representative may not retain any compensation due under Section 66-5-301 NMSA 1978, and that amount shall be due to the employer. For the purposes of this section, the employer shall not be deemed to pay the premium for uninsured motorist coverage in a lease arrangement in which the employer pays the worker an expense or mileage reimbursement amount that may include as one factor an allowance for insurance coverage.

History: Laws 1986, ch. 22, § 43; 1987, ch. 235, § 51; 1989, ch. 263, § 85; 1990 (2nd S.S.), ch. 2, § 59.

The 1990 (2nd S.S.) amendment, effective January 1, 1991, added the Subsection A and B designations, deleted "or employee" following "worker" four times in Subsections A and B, added "except as provided in Subsection C of this section" at the end of Subsection A, substituted "In a circumstance covered by Subsection A of this section" for "In such case", and "that" for "which" twice in Subsection B, and added Subsection C.

I. GENERAL CONSIDERATION.

Section was not expanded to recognize an independent right to bring suit against a third-party tortfeasor. Liberty Mut. Ins. Co. v. Salgado, 2005-NMCA-144, 138 N.M. 685, 125 P.3d 664.

This section provides a derivative right. Liberty Mut. Ins. Co. v. Salgado, 2005-NMCA-144, 138 N.M. 685, 125 P.3d 664.

The legislature intended that (1) an injured workman (worker) shall not be denied the right to recover damages caused by the negligence of a third person because he has received workmen's (workers') compensation benefits for the same injury, but, (2) he shall not be allowed to retain both the compensation benefits and the damages recovered from such third person, and (3) the section, by operation of law, assigns to the employer so much of the judgment or payments received from such third person as the injured workman (worker) received as compensation benefits. Reed v. Styron, 1961-NMSC-119, 69 N.M. 262, 365 P.2d 912.

This section plainly intends to prevent dual recovery, and an erroneous selection or election of remedy should not be construed as forever terminating the right to receive the benefits of the Workmen's (Workers') Compensation Act. The employer, or its insurer, had the right to reimbursement of any amounts paid the employee, in the event the employee successfully sued a third party but the right to indemnity is not such a right as should operate to destroy the benefits of the workmen's (workers') compensation statute. Brown v. Arapahoe Drilling Co., 1962-NMSC-051, 70 N.M. 99, 370 P.2d 816.

Purpose of Subsection C. — The plain language of the statute is evidence that the legislature intended to prevent an employee's double recovery from discrete and independent insurance coverage provided by the employer. Draper v. Mountain States Mut. Cas. Co., 1994-NMSC-002, 116 N.M. 775, 867 P.2d 1157.

II. RECOVERY FROM THIRD PARTY.

Workman (Worker) is indispensable party in suit to recover damages from a third party tort-feasor under this section even though the employer's insurer has paid the employee under the Workmen's (Workers') Compensation Act because it is the workman (worker) who has the claim against the third party. Herrera v. Springer Corp., 1973-NMCA-041, 85 N.M. 6, 508 P.2d 1303, rev'd on other grounds, 1973-NMSC-057, 85 N.M. 201, 510 P.2d 1072.

Compensation insurer not indispensable party to workmen's (workers') suit. — As the right to collect is in the workman (worker), the compensation insurer does not own the right to enforce liability and cannot release the third party from liability, and therefore is not an indispensable party to the workmen's (workers') suit. Herrera v. Springer Corp., 1973-NMCA-041, 85 N.M. 6, 508 P.2d 1303, rev'd on other grounds, 1973-NMSC-057, 85 N.M. 201, 510 P.2d 1072.

The underlying concern with third party actions is that the claimant will receive a "double recovery." Transp. Indem. Co. v. Garcia, 1976-NMCA-059, 89 N.M. 342, 552 P.2d 473, cert. denied, 90 N.M. 9, 558 P.2d 621.

Provisions for assignments valid. — Provisions of the Workmen's (Workers') Compensation Act providing for assignments of personal injury causes of action are valid. Motto v. State Farm Mut. Auto. Ins. Co., 1969-NMSC-178, 81 N.M. 35, 462 P.2d 620.

An insured can, through a subrogation clause, assign his cause of action, but the insured must abide by the terms of the clause in order to collect. Motto v. State Farm Mut. Auto. Ins. Co., 1969-NMSC-178, 81 N.M. 35, 462 P.2d 620.

Assignment of action. — An employee who receives compensation from employer's insurer for an injury does not assign his entire cause of action against a third party for damages. This question is determined by the Workmen's (Workers') Compensation Act. Kandelin v. Lee Moor Contracting Co., 1933-NMSC-058, 37 N.M. 479, 24 P.2d 731.

Although the workmen's (workers') compensation statutes do not create a right of subrogation or assignment in an insurer, but merely the right to reimbursement, a claimant may voluntarily assign his rights to an insurer which may bring an action in its own name against the party responsible for the workmen's (workers') injuries. Seaboard Fire & Marine Ins. Co. v. Kurth, 1980-NMCA-112, 96 N.M. 631, 633 P.2d 1229, cert. denied, 95 N.M. 426, 622 P.2d 1046 (1981).

Recovery from third-party not a bar to benefits. — Prosecution to judgment of a third-party action is not a bar to subsequent collection of workers' compensation benefits; if there is a problem with a satisfaction of the third-party claim, it does not go to double recovery, it goes to the amount of reimbursement or credit to which the employer is entitled. Montoya v. AKAL Sec., Inc., 1992-NMSC-056, 114 N.M. 354, 838 P.2d 971.

The decision in Montoya v. AKAL Sec., Inc., 1992-NMSC-056, 114 N.M 354, 838 P.2d 971, applied retroactively to allow an employee to continue to recover compensation benefits notwithstanding her settlement of a third-party tort claim. Gutierrez v. City of Albuquerque, 1995-NMCA-139, 121 N.M. 172, 909 P.2d 732, rev'd on other grounds, 1998-NMSC-027, 125 N.M. 643, 964 P.2d 807.

Debtor-creditor relationship where recovery against third party. — This section creates a conditional debtor-creditor relationship. That condition is operative only if a third party recovery is made by the claimant. Accordingly, the carrier cause of action, upon the happening of the condition, is against the claimant and not the third party. Transport Indem. Co. v. Garcia, 1976-NMCA-059, 89 N.M. 342, 552 P.2d 473, cert. denied, 90 N.M. 9, 558 P.2d 621.

Carrier charged with proportionate share of costs for action against third party. — Workmen's (Workers') Compensation Acts are to be liberally interpreted in favor of the workman (worker). Where no guidance is given, fundamental fairness must be the guidelines. In the instant case, it was the claimant who bore the burden of the expense and risk of litigation of the third party action. It would be unduly burdensome on the claimant to pay all of the expenses and by the same token it would unjustly enhance the economic position of the carrier not to assess a portion of the costs against it. Accordingly, the carrier should be charged with his proportionate share of the costs. Transport Indem. Co. v. Garcia, 1976-NMCA-059, 89 N.M. 342, 552 P.2d 473, cert. denied, 90 N.M. 9, 558 P.2d 621.

Employer's negligence as affecting his action against third party. — This statute omits any mention of the situation where negligence of the employer is to be considered as affecting the employer's right of action against a third party; thus, there is but one cause of action, and the employer or his insurer is specifically granted reimbursement in this single cause of action. Royal Indem. Co. v. Southern Cal. Petroleum Corp., 1960-NMSC-053, 67 N.M. 137, 353 P.2d 358.

Consolidation of actions. — Where an insurer's cause of action has been consolidated with employee's, against party causing employee's injury, the vacation of such order of consolidation is erroneous. Kandelin v. Lee Moor Contracting Co., 1933-NMSC-058, 37 N.M. 479, 24 P.2d 731.

Employer's share of attorneys' fees. — Determination of an employer's proportionate share of attorney fees and costs incurred in an action against a third-party tortfeasor must take into consideration both compensation benefits already paid and relief from future workers' compensation liability. Trujillo v. Sonic Drive-In/Merritt, 1996-NMCA-106, 122 N.M. 359, 924 P.2d 1371.

Recovery of advanced litigation expenses by employer. — Reimbursement by the worker of a proportionate share of litigation expenses advanced by the employer in an action against a third-party tortfeasor was appropriate under Subsection B. Trujillo v. Sonic Drive-In/Merritt, 1996-NMCA-106, 122 N.M. 359, 924 P.2d 1371.

Resolution of issues between workman (worker) and third party controls both the rights and liabilities of the compensation insurer as if the workman (worker) obtains a settlement, or recovers from the tort-feasor; the right to reimbursement is established, and if the workman (worker) fails to recover, the right to reimbursement is lost. Herrera v. Springer Corp., 1973-NMCA-041, 85 N.M. 6, 508 P.2d 1303, rev'd on other grounds, 1973-NMSC-057, 85 N.M. 201, 510 P.2d 1072.

Insurance company as party plaintiff. — If an insurance company, claiming a right to reimbursement for funds expended, and the insurance carrier for the defendants, is not allowed to become a party plaintiff, it will forfeit its rights to reimbursement under this section. Varney v. Taylor, 1963-NMSC-036, 71 N.M. 444, 379 P.2d 84.

Insurance company can intervene. — An insurance company, claiming a right to reimbursement for funds expended, can intervene as a party-plaintiff when the same company is the insurance carrier for the defendants only under such conditions as would properly protect all the parties to the litigation. Varney v. Taylor, 1963-NMSC-036, 71 N.M. 444, 379 P.2d 84.

Insurance company bound by judgment. — Whether or not an insurance company, claiming a right to reimbursement for funds expended, can intervene as a party plaintiff in a suit brought by decedent's survivors against defendant for which company is also the insurance carrier, it will be bound by the judgment in such case. Varney v. Taylor, 1963-NMSC-036, 71 N.M. 444, 379 P.2d 84.

Insurance company not compelled to be party. — The workmen's (workers') compensation insurance company is not "compelled by law" to be a party in an action for damages against a third party. Schulte v. Baber Well Servicing Co., 1982-NMCA-036, 98 N.M. 547, 650 P.2d 831, cert. denied, 98 N.M. 478, 649 P.2d 1391.

Assessment of costs against intervenor insurer. — It is within the informed discretion of the trial court to assess costs against an insurer who intervenes in the worker's suit against an alleged tortfeasor. Eskew v. National Farmers Union Ins. Co., 2000-NMCA-093, 129 N.M. 667, 11 P.3d 1229.

Carrier cannot intervene until damages awarded. — The court erred by granting a worker's compensation carrier leave to file a complaint-in-intervention for reimbursement and by ordering the carrier's intervention into an underlying wrongful death suit against a third-party defendant prior to a judgment for damages being awarded the plaintiff. Fernandez v. Ford Motor Co., 1994-NMCA-063, 118 N.M. 100, 879 P.2d 101, cert. denied, 118 N.M. 90, 879 P.2d 91

Immunity of co-employee. — The immunity of an employee for an injury done to a fellow employee is not limited to negligent injury; rather, the provisions of the Workmen's (Workers') Compensation Act accord immunity for all causes of action, all common-law rights and remedies, for negligence or wrong including intentional torts. Gallegos v. Chastain, 1981-NMCA-014, 95 N.M. 551, 624 P.2d 60, overruled by Delgado v. Phelps Dodge Chino, Inc., 2001-NMSC-034, 131 N.M. 272, 34 P.3d 1148.

Workman (Worker) giving release to third person. — A workman (worker) injured by a third person while employed is at liberty to settle with the third person for any sum, even less than he would have received under this act, but if he does, he may not recover compensation. A release to the third person gives nothing to be assigned to the employer. White v. N.M. Hwy. Comm'n, 1938-NMSC-060, 42 N.M. 626, 83 P.2d 457.

Applicable statute of limitations. — Where a workers' compensation insurer settles with an injured worker, receives an assignment of his negligence cause of action to the extent of the payment, and seeks reimbursement from a third party, the relevant statute of limitations is not Section 37-1-4 (four-year period), which governs unspecified actions, but Section 37-1-8 (three-year period), which governs actions for personal injury, which begins to run on a subrogated insurer's action against a third-party tortfeasor at the same time that the statute of limitations would begin to run on an action by the insured, or his personal representative in the event of the death of the insured. American Gen. Fire & Cas. Co. v. J.T. Constr. Co., 1987-NMCA-094, 106 N.M. 195, 740 P.2d 1179.

III. REIMBURSEMENT.

This is a reimbursement statute and there is but a single cause of action in employee, even though a part of the recovery is to be paid to the employer or his insurer. Royal Indem. Co. v. Southern Cal. Petroleum Corp., 1960-NMSC-053, 67 N.M. 137, 353 P.2d 358.

This section is a reimbursement statute and provides a right of reimbursement for benefits paid under the Workmen's (Workers') Compensation Act by an employer who is negligent or whose negligence concurs with that of a third person in causing the injury. There is only a single cause of action in the employee against the third person and the right of the compensation insurance carrier to reimbursement follows the success or failure of the employee against such third person. Reed v. Styron, 1961-NMSC-119, 69 N.M. 262, 365 P.2d 912.

The workers' compensation carrier's claim for reimbursement of proceeds paid is against the worker and not the third party. St. Joseph Healthcare Sys. v. Travelers Cos., 1995-NMCA-020, 119 N.M. 603, 893 P.2d 1007.

The insurers of the third-party tortfeasors had no affirmative duty to reimburse a compensation insurance carrier directly when disbursing settlement proceeds even though the insurers knew of the compensation carrier's rights; the latter's only statutory right is the right to reimbursement from the settlement proceeds, to be enforced against the employee. St. Joseph Healthcare Sys. v. Travelers Cos., 1995-NMCA-020, 119 N.M. 603, 893 P.2d 1007.

This section provides a right for reimbursement that derives from a worker's right to recover damages from a negligent third party. Liberty Mut. Ins. Co. v. Salgado, 2005-NMCA-144, 138 N.M. 685, 125 P.3d 664.

Formula for calculating employer reimbursement. The employer's extent of reimbursement for compensation paid is determined by identifying the nature and purpose of the payments made by the employer and comparing the elements of the tort recovery with those which are duplicative of the employer's compensation payments; the total of the duplicative payments is the amount which must be reimbursed. Paradiso v. Tipps Equip., 2004-NMCA-009, 134 N.M. 814, 82 P.3d 985, cert. denied, 2004-NMCERT-001.

Receipt of benefits no bar to action against third-party. — Although the estate of the deceased has received workmen's (workers') compensation benefits from the lessor by means of a settlement agreement, the plaintiff is not denied the right to bring suit against a third-party tort-feasor; moreover, the lessor's compensation carrier may gain the right of reimbursement from the carrier-lessee depending on the success or failure of the plaintiff at trial. Matkins v. Zero Refrigerated Lines, Inc., 1979-NMCA-095, 93 N.M. 511, 602 P.2d 195.

Recovery from third-party tort-feasor for full loss suffered. — Where a claimant has sought relief from a third-party tort-feasor, the amount of the recovery is for the full loss or detriment suffered by the injured party and makes him financially whole. Seminara v. Frank Seminara Pontiac-Buick, Inc., 1980-NMCA-136, 95 N.M. 22, 618 P.2d 366.

Claimant receiving verdict from third party barred from subsequent compensation claims. — Where claimant elects to sue third-party tort-feasor and receives a verdict with a judgment of zero damages, he is then barred from making a subsequent workmen's (workers') compensation claim. Seminara v. Frank Seminara Pontiac-Buick, Inc., 1980-NMCA-136, 95 N.M. 22, 618 P.2d 366.

Having been made "financially whole" by a damage award, the plaintiff may not retain both compensation benefits and the damages recovered. Strickland v. Roosevelt Cnty. Rural Elec. Coop., 1982-NMCA-184, 99 N.M. 335, 657 P.2d 1184, cert. denied, 99 N.M. 358, 658 P.2d 433 (1983), and cert. denied, 463 U.S. 1209, 103 S. Ct. 3540, 77 L. Ed. 2d 1390 (1983).

Employer's right of reimbursement following joint tort. — Where a workman (worker) has obtained a verdict against third party tortfeasors for a work-related injury and the verdict, under comparative fault principles, includes a determination that the employer is at fault and such fault is a proximate cause of the workman's (worker's) injury, such a determination does not reduce or affect the employer's right to be reimbursed for amounts paid in compensation and medical benefits. Taylor v. Delgarno Transp., Inc., 1983-NMSC-052, 100 N.M. 138, 667 P.2d 445.

Employer entitled to reimbursement where employee sues third party tort-feasors. — Once an employee has recovered a judgment against a third party tort-feasor, that employee may not thereafter claim compensation for the same injury, and the employer, or its insurer, has the right to reimbursement of any amounts paid the employee, in the event the employee successfully sues a third party, since the intent of the Workmen's (Workers') Compensation Act is to prevent double recovery. This is also true where the employee settles the claim against the third party tort-feasor. Security Ins. Co. v. Chapman, 1975-NMSC-052, 88 N.M. 292, 540 P.2d 222.

This section of the New Mexico Workmen's (Workers') Compensation Act has been consistently interpreted as a reimbursement statute involving only one cause of action, under which the workman (worker) sues the third party tort-feasor for the entire amount of damages and the employer or insurer is reimbursed out of amounts received by the workman (worker). Security Ins. Co. v. Chapman, 1975-NMSC-052, 88 N.M. 292, 540 P.2d 222.

Reimbursement limited to worker's duplicative recovery. — An employer is not necessarily entitled to a full reimbursement from an employee's fair, but partial, tort recovery, but is entitled to recoup the amount of a worker's duplicative recovery; moreover, those amounts that the employee reasonably receives for injuries not addressed by workers' compensation, such as pain and suffering, may not be recovered by the employer. Gutierrez v. City of Albuquerque, 1998-NMSC-027, 125 N.M. 643, 964 P.2d 807.

Where an employee received workers' compensation benefits under the employer's policy and also received benefits under the employer's uninsured motorist policy, the employer was entitled solely to reimbursement and potential future offset credit for those uninsured motorist benefits that duplicated the workers' compensation benefits paid or to be paid to the employee. Chavez v. S.E.D. Labs., 2000-NMSC-034, 129 N.M. 794, 14 P.3d 532.

Right to reimbursement not waived by failure to participate in trial. — The insurer's right to reimbursement is established by this section and that right is not waived by failure to participate in the trial of the workman's (worker's) action against the third party. Herrera v. Springer Corp., 1973-NMCA-041, 85 N.M. 6, 508 P.2d 1303, rev'd on other grounds, 1973-NMSC-057, 85 N.M. 201, 510 P.2d 1072.

Payments presumed for original injury where there was no court determination as to the compensation award or as to whether the compensation paid by the insurer was for the original injury or for an alleged aggravation caused by an alleged improper blood transfusion, and the employer's insurer paid the employee benefits which were less than a total permanent award (paying him for a period and then discontinuing payments) altogether, without a release having been obtained, the employee neither giving an election in writing as required by Section 52-1-49 NMSA 1978 nor filing suit against the employer for additional workmen's (workers') compensation benefits for the alleged malpractice, but instead electing to sue the physicians, technicians and hospital; then under the facts any payments made by the insurer to the employee must be presumed to be benefits for his original injury, and it was not entitled to reimbursement from the employee where he settled with the hospital and doctors. Security Ins. Co. v. Chapman, 1975-NMSC-052, 88 N.M. 292, 540 P.2d 222.

IV. UNINSURED MOTORIST INSURANCE.

Recoveries based upon an employer-provided uninsured motorist policy, as opposed to a third-party tort action, is a distinction without a difference for the purpose of calculating the amount of reimbursement due an employer. Chavez v. S.E.D. Labs., 2000-NMCA-034, 128 N.M. 768, 999 P.2d 412.

No offset for underinsured motorist insurance provider. — Subsection C of this section does not entitle the uninsured or underinsured motorist insurance provider to a credit for the amount of workers' compensation benefits that the employee was not required to reimburse to the workers' compensation carrier by reason of a settlement between the employee and the workers' compensation carrier; the settlement did not implicate or affect the UIM insurer's responsibility under the UIM policy and the UIM insurer remained liable for the full amount of UIM coverage to the extent of damages proved by the employee. Mountain States Mut. Cas. Co. v. Vigil, 1996-NMCA-062, 121 N.M. 812, 918 P.2d 728.

Employee may retain difference from coverage benefits. — Subsection C does not preclude an employee from retaining the difference between uninsured motorist benefits and workers' compensation benefits, notwithstanding the fact that the employer has paid the premiums for each coverage. The fact that the same insurer issued both policies to the employer is immaterial. If the employee is an insured occupant of the vehicle under the terms of the automobile policy, he is entitled to recover the proceeds of the uninsured motorist coverage subject only to his employer's statutory right to reimbursement for the workers' compensation benefits that it has paid. Draper v. Mountain States Mut. Cas. Co., 1994-NMSC-002, 116 N.M. 775, 867 P.2d 1157.

Estate of deceased worker not entitled to recover under employer's uninsured motorist insurance. — Where estate of decedent sought to recover damages under decedent's employer's uninsured/underinsured motorist coverage after decedent was killed in the course of his employment by a co-worker operating an employer-owned motor vehicle, decedent's estate was not entitled to recover damages under the employer's uninsured motorist insurance, because the uninsured motorist statute, 66-5-301(A) NMSA 1978, only benefits persons "legally entitled to recover damages from owners or operators of uninsured motor vehicles", and under the Workers' Compensation Act (WCA), 52-1-1 to -70 NMSA 1978, an employee who was injured in a workplace accident caused by an employer or its representative may only seek a remedy authorized under the WCA, and under the WCA such a employee is not legally entitled to recover damages under the uninsured motorist statute. Vasquez v. American Cas. Co. of Reading, 2017-NMSC-003.

Law reviews. — For survey of 1990-91 workers' compensation law, see 22 N.M.L. Rev. 845 (1992).

For note, "Pursuing the 'Benevolent Purpose' of New Mexico's Workers' Compensation Statute as a Reimbursement Statute: Montoya v. AKAL Sec., Inc.," see 24 N.M.L. Rev. 577 (1994).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 82 Am. Jur. 2d Workmen's Compensation §§ 429 to 432.

Right of workers' compensation insurer or employer paying to a workers' compensation fund, on the compensable death of an employee with no dependents, to indemnity or subrogation from proceeds of wrongful death action brought against third-party tortfeasor, 7 A.L.R.5th 969.

101 C.J.S. Workmen's Compensation §§ 992 to 1011.