by Barbara J. Koenig, Foster, Rieder & Jackson, P.C.
The New Mexico Supreme Court recently responded to a certified question from the U.S. District Court for the District of New Mexico in a lawsuit filed by the family of a worker who was killed in an accident at a salvage yard that was likely caused by a coworker. The supreme court’s answer turned on the resolution of a conflict between language in the New Mexico Workers’ Compensation Act (WCA) and the uninsured motorist (UM) statute.
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The worker’s estate sought to collect benefits under the employer’s UM policy after having already collected workers’ comp benefits, as well as UM benefits, under the deceased worker’s auto insurance policy.
The claim against the employer’s policy was denied by the insurance carrier under the exclusivity provision of the WCA, which designates workers’ comp benefits as the sole remedy for an employee injured in the course of performing his duties.
Because the case turned on a question of statutory interpretation of state law, the district court asked the New Mexico Supreme Court to determine whether the worker’s estate was entitled to maintain such a claim. The supreme court concluded that the estate couldn’t recover UM benefits from the employer’s insurance company because the WCA provides the exclusive remedy when a worker is killed in an accident involving a coworker.
Background
“George” was killed while he was working at Coronado Wrecking and Salvage Company in Albuquerque when he was struck by a steel beam that fell off a forklift. A coworker who was operating the forklift had jumped off to check whether the steel beam was secure.
While the forklift was unattended, the steel beam slid off the forks, striking and killing George. Because the accident occurred while he was working, Coronado’s workers’ comp insurance provider paid workers’ comp benefits to George’s estate.
The accident involved a motor vehicle (the forklift), so George’s estate also filed two claims for UM benefits. One claim was asserted against George’s personal automobile insurance carrier, which paid benefits. The second claim was against Coronado’s automobile insurance carrier, which denied coverage, prompting the estate to file a lawsuit in state court. The insurance carrier had the case transferred to federal court.
Question for New Mexico Supreme Court
The central issue in the lawsuit involved a question of interpretation regarding the New Mexico UM law and the WCA, so the federal district court posed the following question to the New Mexico Supreme Court:
Is a worker injured in the course of employment by a coworker operating an employer[-]owned motor vehicle a person “legally entitled to recover damages” under his employer’s uninsured/underinsured motorist coverage?
The answer wasn’t obvious from the language of the two statutes. On the one hand, the UM law permits any person legally entitled to recover damages as a result of a motor vehicle accident to make a claim for UM benefits.
On the other hand, the WCA bars any claim by an injured worker (or his estate) against his employer for compensation for workplace injuries, stating explicitly that it provides the exclusive remedy for an injured employee who is harmed in a workplace accident.
To answer the question posed by the district court, the supreme court had to determine whether the exclusive remedy provision in the WCA is consistent with the provision in the UM statute that extends protection to persons who are “legally entitled to recover damages from owners or operators of uninsured motor vehicles.”
WCA Ruled the Exclusive Remedy
The WCA is designed as a compromise, intended to strike a balance that benefits both employees and employers. An employee who is injured in the workplace is limited to the monetary workers’ comp benefits that he is allowed by law, but the payments based on lost wages are timely and efficient. The worker is not required to prove the employer was at fault in causing the injury. Also, the employer knows that the WCA will protect it from costly and lengthy lawsuits, except in very unusual circumstances.
Even if the employee or the employer’s agent negligently caused the injury or death, the employer knows that it cannot be held liable beyond the workers’ comp benefits it is lawfully required to provide through its workers’ comp insurance policy. Thus, under the WCA, a worker (or his estate if he was killed) who is injured on the job is entitled to limited compensation, and in return, the employer is granted immunity from suit.
New Mexico’s UM law is designed to protect innocent victims from sustaining uncompensated damages as a result of motor vehicle accidents. The law protects individual members of the public against irresponsible drivers who fail to purchase automobile insurance as well as from drivers whose insurance policies fail to provide adequate coverage to pay for the damages they have caused. An individual whose damages are not compensated by the at-fault driver may recover damages from his own UM coverage.
If a motor vehicle accident is caused by an uninsured third party (not a coworker) while an employee is attending to his employer’s business, the employee is legally entitled to recover damages from his employer’s UM carrier, although he will have to reimburse the employer for a portion of the workers’ comp benefits he received for the same accident.
George’s estate argued that even though his accident was caused by a coworker, it should be allowed to pursue UM benefits from the employer’s automobile insurance policy because the purpose of the UM law should outweigh the WCA’s prohibition against lawsuits for damages suffered in a workplace accident.
For example, if George’s accident had been caused by a third party instead of someone employed by Coronado, his estate would have been legally entitled to recover damages from the employer’s automobile insurance company.
The New Mexico Supreme Court rejected the estate’s arguments and affirmed the language in the WCA that deems workers’ comp the exclusive remedy for an injured worker, or a deceased worker’s estate, against his employer when the accident is caused by or involves a coworker.
The WCA prohibits lawsuits, other than workers’ comp lawsuits, against “the employer, or his representative, including the insurer, guarantor or surety of any employer” for injuries or death covered by the Act.
That language supersedes the policy and language of the UM law and prevents George’s estate from bringing any other claim against Coronado or its automobile insurance carrier. Vasquez v. American Casualty Co. of Reading, Pennsylvania, 2016-NMSC-___, No. S-1-SC35681 (Oct. 13, 2016).
Takeaway
The ruling in this case applies to workplace accidents involving coworkers, including supervisors and managerial employees. If George’s accident had been caused by a person who wasn’t associated in any way with Coronado, the outcome might have been different.
The supreme court failed to explain why the fact that the accident was caused by a coworker provided a basis for a distinction in the allocation of benefits. Nonetheless, because the accident involved a coworker, George’s estate wasn’t entitled to recover anything from the employer except the workers’ comp benefits paid to the family upon his death.
Barbara J. Koenig, a contributor to New Mexico Employment Law Letter, can be reached at barbara@frjlaw.com.