While on the job for Coronado Wrecking and Salvage, Andrew Vasquez directed the loading of steel beams onto a flatbed trailer. A co-worker operating a forklift became concerned the beams weren’t properly positioned on the forks. Instead of lowering them to the ground, he climbed out of the cab for a better view. As he did so, one of the steel beams slid off and struck Vasquez, pinning him to the ground. He died a short time later in the hospital.
According to an order issued by the trial judge, the New Mexico Occupational Health and Safety Bureau investigated the accident and cited Coronado for violations of various safety regulations. That left the question of compensation for Vasquez’s survivors.
Because he was killed on the job, his estate collected workers’ compensation. Workers’ comp has always been a trade-off. An injured worker (or the estate of a worker killed on the job) is entitled to limited compensation without a showing of fault. In return, the employer is granted immunity from being sued for the accident.
But how far does the immunity from suit extend? One New Mexico statute says comp benefits are provided “in lieu of any other liability whatsoever.” That word “whatsoever” is comprehensive. Viewed in isolation, the statute can only mean that a worker injured or killed on the job is prohibited from obtaining compensation from any other source. But not so fast! Another statute says: “No cause of action outside the Workers’ Compensation Act shall be brought … against the employer or [its] representative, including the insurer.” That provision limits the grant of immunity to only a small circle, leaving a wide field of others who might potentially be subject to suit. So which statute is controlling?
The inconsistency between those statutes merely begins the complications. New Mexico also has on its books the Mandatory Financial Responsibility Act, which establishes the general rule that all car insurance policies must include coverage for accidents caused by uninsured motor vehicles. Coronado’s forklift was an uninsured motor vehicle.
Andrew Vasquez’s personal car insurance policy included uninsured motorist coverage. So did Coronado’s car insurance. (Coronado had insurance on vehicles other than the forklift, or so the judicial opinions in the case imply.) Vasquez was a beneficiary under both policies. But after drawing comp benefits, was his estate entitled to collect under either policy? Both? Neither?
If comp benefits are truly exclusive, such that his estate was prohibited from obtaining compensation from any other source “whatsoever,” then the answer is obviously “neither.” But if instead the grant of immunity prohibits claims only against the employer or its representative or insurer, the answer is “one” or possibly “both” (depending on whether “insurer” means “workers’ comp insurer” or “any insurer”). The problem gets even trickier when one considers the purpose behind the uninsured motorist law, which is precisely to provide insurance benefits to those who are injured or killed by the operation of uninsured motor vehicles. People like Mr. Vasquez.
How to enforce all these inconsistent statutes at once? Back in 1987, our state Supreme Court simplified the matter by denying that workers’ comp benefits were exclusive, ruling that an injured worker was entitled to recovery under both comp and the employer’s car insurance. In response, the Legislature enacted a new statute providing yet a third version of workers’ comp exclusivity. The new statute says an injured worker is entitled to uninsured motorist benefits so long as the worker paid the policy premiums. In other words, the worker is entitled to what he or she paid for.
But, the new statute continued, “If the employer paid the premium, the worker or his legal representative may not retain any compensation due under (the policy) and that amount shall be due to the employer.” That statutory language couldn’t be clearer. But clarity alone doesn’t guarantee enforcement in New Mexico’s courts. In 1994, our Supreme Court considered the case of a worker injured by an uninsured motorist while on the job. The court pointed out that enforcing the statute as written could potentially allow the employer to recover more from uninsured motorist coverage than it paid out as comp benefits. The employer could profit from its worker’s injury. That struck the justices as wrong.
In another state, judges might have dutifully enforced the statute as written, while pointing out the anomaly, perhaps suggesting the Legislature consider a rewrite. But our justices effectively rewrote the statute themselves, adding a codicil that appears only in the case reports. The justices held that any insurance proceeds in excess of comp benefits go to the injured worker regardless of who paid the premiums – the opposite of what the statute actually says.
Such was the foggy legal landscape when Andrew Vasquez’s estate sued the insurance company that provided Coronado’s uninsured motorist coverage. The estate claimed that, under the 1994 Supreme Court decision, any amount in excess of the comp benefits should be paid to it even though Coronado paid the premiums.
Under the 1994 decision, the estate’s claim was a strong one, despite being foreclosed by statute.
But after consistently zigging in its previous decisions, the Supreme Court last month decided to zag. It held that Coronado Wrecking, not the Vasquez estate, was entitled to any excess insurance benefits. The court didn’t overrule its 1994 decision, but drew a distinction between injuries caused by third parties, as in 1994, and by co-workers, as in the Vasquez case. Why entitlement to insurance proceeds should turn on that distinction isn’t clearly explained in the opinion. The legal landscape remains foggy, but now the fog has shifted.