New Mexico Injury Attorney Blog

In the case of Ovecka v. Burlington Northern Santa Fe Railway Company, the New Mexico Court of Appeals addressed the issue of vicarious employer liability in the context of a wrongful death suffered in a DWI auto accident involving an employee of Burlington Northern. The central issue in the case was whether the drunken employee's actions could be imputed to Burlington Northern.

The employee, Kenneth Long, had a long history of DWI and alcoholism. His job duties carried him around a wide area of New Mexico. Due to the remote locations of the job sites, Burlington Northern employees were often provided lodging near job locations. Kenneth Long often took advantage of the lodging. He utilized his own vehicle in commuting to and from location. After work one day in Rio Puerco, Mr. Long headed to Grants where lodging was provided by the company. However, Mr. Long did not check in. Instead, he picked up a 12 pack of beer and headed to Gallup to visit estranged family members. Mr. Long became extremely intoxicated and headed back toward Grants. At 9:00 PM, well after leaving work that afternoon, he crossed the highway median colliding head-on and killing Angela Ovecka.

Ms. Ovecka's parents brought the suit on behalf of Angela alleging Burlington Northern's vicarious liability under respondeat superior for Mr. Long's actions. They further alleged negligent hiring and supervision. Burlington Northern moved for summary judgment which was granted by the district court and affirmed on appeal by the New Mexico Court of Appeals.

The court set forth well established principles of respondeat superior. In short, the court found that Mr. Long was not acting within the course and scope of employment at the time of the accident. The court stated that an "an employee enroute to, or returning from, his place of employment, using his own vehicle is not within the scope of his employment absent additional circumstances evidencing control by the employer at the time of the negligent act or omission of the employee." Under the facts, the court found that Mr. Long was returning home, well after business hours, and there was no other evidence suggesting control over Mr. Long at the time of the accident.

The court also refused the plaintiff's arguments regarding negligent hiring and supervision. The court stated that negligent hiring and supervision claims require both foreseeability of harm and a duty on the part of the employer. The court determined basically that an accident such as this was not a foreseeable harm arising from the hiring of Mr. Long. In the absence of foreseeability, there could be no duty to prevent the harm.

Naturally, Mr. Long was driving an uninsured vehicle at the time of the accident. The case did not address whether or not Ms. Ovecka carried uninsured/underinsured motorist coverage. In the absence of such coverage, Ms. Ovecka's tragic death likely would have gone completely uncompensated.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

There is a strong public policy for the provision of uninsured/underinsured motorist (UM/UIM) coverage in auto accidents. In New Mexico, this policy dictates a liberal reading of both the statute governing uninsured motorist coverage as well as the auto insurance policies themselves.

An auto insurance policy will be held to provide uninsured coverage to the same degree as the liability coverage unless there is a specific signed rejection of the UM/UIM coverage attached to the policy. In addition, the UM/UIM coverage will have the same geographical coverage as the liability coverage under the policy. Because insurance policy limits are almost always an issue in car accident cases, the laws and cases governing uninsured motorists are critical. The issue can even arise on vacation or other travel abroad.

In the 2001 case of State Farm v. Marquez, the New Mexico Court of Appeals held that UM/UIM coverage in the policy extended to coverage for an automobile accident that occurred in Mexico. The court held this despite the fact that the policy had a specific exclusion of uninsured/underinsured coverage in Mexico.

The court ruled that because the policy provided liability coverage in Mexico, there was UM/UIM coverage as well. The court ruled that the policy behind uninsured/underinsured motorist coverage dictated that the uninsured/underinsured coverage be territorially coextensive with the liability coverage despite the language in the policy excluding uninsured motorist coverage in Mexico.

The court recognized that an insurance policy could exclude both liability and uninsured motorist coverage outside the United States. However, the uninsured coverage would follow the liability coverage. The court expressly refused to address whether or not an insured driver could reject uninsured coverage outside the United States. In light of subsequent case-law, it is clear that a policy holder could waive uninsured coverage outside the U.S. when the rejection is signed and properly attached to the policy.

If you have suffered personal injuries as a result of an automobile accident outside the United States, you would be well advised to have an experienced accident and injury attorney review your policy for possible coverage. Chances are that there is no coverage on the other driver and little chance of direct recovery through a lawsuit against the other driver.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

Calculation of the Medicare set-aside in a personal injury action can be a long and tedious process. The law allows for a reasonable allocation for future medical expenses. Defining "reasonable" is anything but easy.

The set-aside calculation takes into consideration the patient's current condition, past medical treatment, future medical needs, life expectancy along with numerous other factors. Medicare may judge "reasonable" future medicals at a far higher amount than is suggested by the facts. An excessive set-aside coupled with the lien on past paid Medicare benefits may render a settlement or judgment worthless to the injured person as the fight for recovery is purely for the benefit of Medicare. This is particularly true in cases with catastrophic injuries and uninsured/underinsured or judgment proof defendants. There simply is not enough money to go around.

Worse still, the review and approval process can take months upon months to conclude. All the while, the statute of limitations is ticking along. The lengthy time necessary to conclude the review and approval can push a case that would otherwise settle into litigation. This of course places even greater costs on the injured person. Even then, Medicare holds the cards and they do not have to budge on their numbers. At some point, a rational plaintiff must decide whether litigation to pay Medicare and attorney fees is really worth the time and stress.

The bottom line is that the process with Medicare must begin early. Time is not really on your side in these cases. On the one hand there is Medicare and on the other the statute of limitations. The statute of limitations has a way of sneaking up on plaintiffs and many lawyers will not, and those that do should not, touch a case with these kinds of issues and short fuse on the statute of limitations.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

The 10th Circuit recently addressed the reduction of state Medicaid liens against personal injury settlements in Price v. Wolford. The case involved a medical malpractice action brought on behalf of child that suffered severe brain injuries during delivery. The case settled for $1.1. million for the birth related injuries. The Oklahoma Health Care Authority (OHCA) asserted a Medicaid lien of $544,282.26 against the settlement. The district court reduced the Medicaid lien to $67,666.67 in proportion to value of the settlement in relation to the total value of the claim as well as for non-medical related damages.

Essentially the district court relied upon the plaintiff's valuation of the child's future medical costs at $12 million. The reduction also relied of Arkansas Dept. of Health and Human Services v. Ahlborn where the Supreme Court asserted that Medicaid may recover only against that portion of the settlement reflecting recovery of medical expenses. Compensation for other damages such as lost income, pain and suffering, loss of enjoyment of life and so on are beyond the reach of the lien. Due to the recovery of only a portion of the claimed medical expenses as well as the existence of significant non-medical damages, the district court substantially reduced the OCHA lien.

OHCA appealed on several grounds. The 10th Circuit denied their appeals on all but one issue which was whether the plaintiff had provided sufficient evidence of the value of the claim to justify the lien reduction over the objections of OHCA. The 10th Circuit found that insufficient evidence had been presented to justify the valuation. Thus the case was sent back to district court for the purpose of valuating the child's claim.

Notably, OHCA was present at the settlement conference where the claims were settled. It is not clear why the Medicaid lien was not addressed at that time. Due to the difficulties of dealing with Medicaid and Medicare, and the harsh consequences of failure to properly negotiate liens in advance of settlement, it is equally unclear why these issues were not addressed prior to the settlement conference.

In light of the fact that OHCA was present at the settlement conference, there may have been a dispute as to the value of the lien at that time. Perhaps, OHCA was taking an unreasonable position on its lien refusing the legally mandated reduction under Alhborn and federal statute. In any event, failure to reach an agreement on the lien at settlement laid the foundation for OHCA's later unreasonable intervention and demand for the full value of its lien.

This case points out the importance of negotiated lien reduction in advance of any settlement. Unfortunately, these liens may dictate the settlement options. In the event that Medicaid takes a unreasonable position as OHCA has done in this case, settlement may not be possible without the intervention of the court. This intervention should be sought in advance of settlement to avoid the unfortunate outcome here.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

Personal injury cases often involve Medicare provided medical benefits. Medicare will claim liens against any personal injury settlement for both past and future medical expenses. Past medical benefits are hard enough to address due to the difficulty of working with Medicare on the settlement of its liens. Future medical is even more difficult due to the uncertainty of those Medicare benefits.

Prior to the settlement of any personal injury claim, it is critical that all Medicare liens be addressed. This includes liens to cover future benefits. Coverage of future Medicare benefits is addressed through Medicare Set-Asides. A Medicare Set-Aside essentially requires that a portion of the settlement or verdict be set aside to cover future medical benefits related to the injuries suffered in the accident. Medicare cannot claim liens against the settlement for unrelated medical benefits.

Failure to set aside funds for future Medicare benefits can be financially devastating. Medicare will take the position that no future Medicare benefits will be provided until the entire settlement amount has been exhausted. In addition, it becomes more difficult to dispute what is and is not related to the accident. Therefore it is important to address the set aside prior to settlement. Negotiation of the set aside up front can result in substantial reductions in the amount required to be set aside.

Basically, the negotiated set aside will fix an amount that must be expended by the injured person prior to Medicare picking up any additional medical expenses. Once that amount has been expended, then Medicare benefits will resume. Again, in the event that the set aside is not negotiated in advance of settlement, Medicare may take the position that the entire settlement amount must be expended prior to the resumption of Medicare benefits.

Due to the extreme position that Medicare may take in the event of failure to negotiate the set aside in advance of settlement, it is important to begin this process well before an anticipated settlement or trial. Unfortunately, this is easier said than done due to the difficulty of working with Medicare. It is a slow and tedious process but essential to protect the funds of a personal injury settlement or judgment.

Parrish Collins
Albuquerque Attorney
www.CollinsAttorneys.com

Medicare/Medicaid will have a lien on all funds from a personal injury settlement or judgment in cases where Medicare/Medicaid benefits were received. Medicare/Medicaid is very aggressive in pursuing these liens. Failure to properly account for and reimburse Medicare/Medicaid for its liens can result in serious penalties for both the personal injury plaintiff and his or her attorney.

Medicare/Medicaid often claims liens on all medical expenses, both past and future. These claims can significantly erode the funds received by the injured plaintiff. This is particularly so in cases where the personal injury plaintiff is seriously injured and there is little or no liability insurance and the defendant has no assets to cover a judgment. This is frequently the case in auto accidents where the at-fault driver is uninsured or underinsured.

Because Medicare/Medicaid typically claims a lien on all medical benefits provided by Medicare/Medicaid, the lien is often overstated, often times greatly overstated. Medicare/Medicaid is not entitled to recover on medical benefits that are not related to the incident that is the subject of the personal injury claims. This is frequently an issue since many of those injured in accidents had previous medical issues for which they were receiving and continue to receive Medicare/Medicaid benefits.

Medicare/Medicaid will often issue a lien that covers all medical benefits received by the plaintiff following the accident. Though the plaintiff may be receiving treatment for the accident related injuries, he or she will still be receiving benefits for other medical conditions during this time period. It is therefore important to go through the lien item by item to insure that Medicare/Medicaid is not claiming a lien on unrelated medical benefits.

Once these unrelated benefits are identified, Medicare/Medicaid will reduce the lien accordingly. In some cases, these unrelated medical expenses may form the bulk of the lien. A careful review of the Medicare/Medicaid lien can result in substantial savings to the plaintiff. In short, a reduction of the Medicare/Medicaid lien results in a dollar for dollar increase in the funds received by the plaintiff from the settlement or verdict. Likewise, each dollar paid to Medicare/Medicaid reduces the amount received by the plaintiff making it very important to carefully review and evaluate every item claimed on the Medicare/Medicaid lien.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

Many drivers that are involved in auto accidents have no medical insurance. As a result, they are often unable to get necessary medical treatment for their injuries. This is especially frustrating when the accident was caused by the negligence of the other driver. As with many insurance issues, the injured driver's rights can be somewhat confusing.

The issue comes up in frequently in auto accidents in New Mexico. Many times, the other party has no insurance or has very little insurance. However, the issue comes up just as often when the other driver does have auto insurance. In fact, this situation is even more frustrating when the other driver has insurance but the insurance company refuses to advance medical expenses despite their insured driver's clear liability for all injuries and recoverable damages including medical expenses suffered as a result of the accident.

Unfortunately, this is the case more often than not. The insurance company for the negligent driver has no duty to advance medical expenses for the innocent driver's injuries. The insurance company has a duty only to its own insured. As a result of the absence of any duty to the injured driver, insurance companies routinely refuse to advance medical expenses. In fact, it is rare that an insurance company would advance medical expenses to an injured driver other than its own policy holder.

New Mexico has the highest rate of uninsured drivers in the nation. Uninsured/Underinsured Motorist (UM/UIM) coverage is critical since the only coverage an innocent driver is likely to have in an auto accident is his or her own insurance. In addition to UM/UIM coverage, all drivers should carry their own MedPay coverage. MedPay (Medical Payments Coverage) provides coverage for just the situations discussed here.

MedPay provides for the advancement of medical expenses for its insured in case of an accident. MedPay is no-fault insurance so it is immaterial whose fault it is. MedPay allows an insured driver to seek immediate medical attention with the insurance company billed directly by the medical provider. An insured can choose the level of MedPay coverage which typically begins at $5000 limits. This means that $5000 in medical expenses will except in rare circumstances be automatically covered for injuries suffered in an auto accident.

Unfortunately, many New Mexicans have no auto insurance. They are equally likely to have no medical insurance. As a result, MedPay may provide the only possible source of funds for medical treatment following an auto accident. As with UM/UIM coverage, drivers are wise to carry as much MedPay as possible. This is particularly true for those without medical insurance since even minor auto accidents can result in medical expenses that far exceed $5000.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

New Mexico has a high rate of uninsured. The state has the highest rate of uninsured motorists in the nation. The numbers related to those lacking health insurance are comparable. As a result, many personal injury cases in New Mexico involve Medicare and/or Medicaid.

Many who have suffered personal injuries from the negligence of another are very surprised to hear that Medicare/Medicaid will claim liens against any personal injury settlement funds. Medicare/Medicaid will assert a lien for the amount of medical bills related to the personal injuries. Both Medicare and Medicaid are very aggressive about collecting on those liens. The penalties are quite severe for failure to properly account for and pay these liens.

It should be kept in mind that Medicare/Medicaid may assert liens only for medical bills related to the personal injuries related to the settlement. This includes both past and future medical expenses. However, it includes only medical expenses and only those related to the personal injuries on that particular claim. Because the liens may only include medical expenses related to the personal injuries on that claim, Medicare and Medicaid liens are often overstated.

There are a number of areas where the lien might be overstated and subject to reduction. The area addressed here are attorney fees related to the personal injury claim. Medicare/Medicaid will reduce their liens by the amount of attorney fees. For instance, if attorney fees are 1/3 of the recovery, the liens will be reduced by 1/3 as well. However, like most issues surrounding Medicare and Medicaid, it is important to negotiate these reductions prior to settlement. Both Medicare and Medicaid laws dictate that they be notified prior to any settlement. They are both quite reasonable when approached prior to settlement. The process of lien reduction negotiations is significantly more difficult when initiated subsequent to settlement. This includes the reduction for attorney fees.

If Medicare and/or Medicaid are properly addressed from the beginning of the personal injury action, the reduction of the lien for attorneys fees is automatic. Failure to properly address the liens in advance of settlement can make even the legally mandated reduction of the liens for attorney fees very difficult. In addition, the settlement proceeds cannot be distributed until Medicare and/or Medicaid have been properly addressed. Distribution of the settlement proceeds prior to addressing the liens can be disastrous both for the injured client and the attorney. In the event the case has settled prior to working out the Medicare/Medicaid liens, this can be a long and difficult process. All the while, the clients funds must be held in trust and cannot be released.

Those who have suffered personal injuries must understand the importance of addressing Medicare/Medicaid liens. As stated, many are surprised and even angry that Medicare/Medicaid has asserted liens against their recovery. Many will go further forbidding their attorneys to pay the liens. Of course, this is simply not a possibility and any lawyer heeding those directions would get both the client and the lawyer in a serious financial bind. And in the end, Medicare/Medicaid will recover on their liens. The only question is whether or not the liens have been properly reduced or collected in full due to the failure to properly account for them in advance of settlement.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

In many personal injury cases, the issue of preexisting injuries will be front and center in the calculation of damages. Many times, the defendant who is often represented by an insurance company will argue that plaintiff's injuries preexisted the accident and therefore is no the responsibility on the defendant. Liability and damages often turn on the findings surrounding preexisting conditions.

Defendants are not responsible for preexisting conditions. After all, there must be causation of harm to establish liability and causation cannot be shown for preexisting harms. However, defendants are responsible for incremental harm. The law in New Mexico has been long established that a defendant is liable for any harm done even if the injured person was more susceptible to that harm as a result of a preexisting condition.

This rule is often called the eggshell plaintiff rule meaning that if you negligently hit a person in the head that happens to have a exceptionally fragile skull, you are fully responsible for all harm caused by your negligence. This is the case even though you could not possibly have foreseen such a fragile skull or the terrible damages that might result from your negligence. It is often said that the defendant takes the plaintiff as he finds him.

The rule is reflected in New Mexico Uniform Jury Instruction 13-1802 where it states in part:

If you find that, before any injury in this case, plaintiff was already impaired by a physical or emotional condition, plaintiff is entitled to compensation for the aggravation or worsening of the condition, but not for elements of damages to the extent they were already being suffered. However, damages are to be measured without regard to the fact plaintiff may have been unusually susceptible to injury or likely to be harmed. The defendant is said to "take the plaintiff as he finds [him] [her]," meaning that the defendant, if liable, is responsible for all elements of damages caused by the defendant's conduct even if some of the plaintiff's injury arose because the plaintiff was unusually susceptible to being injured.

The possible tension between the parties becomes clear when reading the UJI 13-1802. On the one hand, the defendant will try to show that the injuries were entirely preexisting, and there was no worsening of those injuries by the negligent conduct of the defendant. The plaintiff is generally forced to acknowledge the prior injuries since there is generally no shortage of medical records on point. However, the plaintiff will argue that the injuries were made worse by the accident. Assuming liability has been established, the outcome of these cases depends on how this issue is resolved.

The parties will often find some middle ground through settlement. However, there are cases where there simply is no middle ground due to honest differences of opinion. There are also many cases where one or the other parties simply has taken an unreasonable and unrealistic position. These are the cases that move forward to trial. The risks of a jury trial are great to both sides making careful and intelligent case evaluation extremely important. This means trying to figure out how a jury will see the case which is easier said than done. Miscalculations will and often do result in tremendous costs to one or the other parties.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

The seminal New Mexico case addressing worker's compensation exclusivity is the 2001 New Mexico Supreme Court case of Delgado v. Phelps Dodge. The case, despite the leap in the protection of workers over prior law, clearly illustrates the marginal protection employees are afforded from the negligent acts of their employers.

The Delgado case involved a fatal incident at a smelting plant where a worker suffering a horrifying death. The term incident is used because it was no accident that Delgado was burned to death. Instead, the facts showed that the employer clearly expected that Delgado would be killed while performing a task that he was grossly unqualified to perform.

The Delgado case illustrates the disdain with which workers are treated under the Worker's Compensation Act. The good and the bad news is that as a result of Delgado, workers enjoy slightly greater protection than in the past. In the past, New Mexico followed the "actual intent test." Delgado set forth the purportedly higher standard of willful and intentional.

The "actual intent test" is most clearly illustrated by the district court's granting of the defendant's motion to dismiss for failure to state a claim. The complaint alleged that the defendants "acted intentionally, with the knowledge that Delgado would be seriously injured and killed as a result of their actions." The district court, following the actual intent requirement, ruled that even if it was true that defendants "did engage in a series of deliberate or intentional acts which they knew or should have known would almost certainly result in serious injury or death to Reynaldo Delgado...the complaint falls short of alleging that [they] actually intended to harm Reynaldo Delgado." In short, the only way an employer could be sued beyond the Worker's Compensation Act was basically if they murdered the worker. How else may this language be read?

The Court in Delgado took the enlightened view that this standard was unacceptable. However, the Court went only slightly further in protecting workers injured as a result of the acts of employers. The Court held instead employers would lose the protection of the Workers Compensation Act only where the "employer willfully or intentionally injures a worker." The Court defined willfulness as follows: "(1) the worker or employer engages in an intentional act or omission, without just cause or excuse, that is reasonably expected to result in the injury suffered by the worker; (2) the worker or employer expects the injury to occur, or has utterly disregarded the consequences of the intentional act or omission; and (3) the intentional act or omission proximately causes the worker's injury."

The new standard is only slightly better than the old. In fact, employers continue to enjoy protection for gross negligence, and arguably for recklessness. Delgado still requires that the act reasonably be expected to lead to the injury of the worker. It further requires that the employer either totally disregarded the possible consequences or fully expected the injuries to occur. This is little better than the "actual intent test" and arguably mere word play. The result is the same, the employer must send a worker into a situation with a reasonable expectation that the worker will be injured or killed. Anything short of that and the employer is protected by the Worker's Compensation Act and the worker (or his survivors) is left to bear the burden of the employer's negligent behavior.

To be expected, the business community reacted with much the same repulsion to the Delgado ruling as did the defendant who warned the Court "that any deviation from the actual intent test will visit an undo hardship upon employers in this State and wreak havoc with New Mexico's workers' compensation system." It truly is tragic that employers can no longer send their employees to certain death. Honestly, what has New Mexico come to when we visit such injustice on our State's businesses?

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com