Hernandez v. Dillards

1 This memorandum opinion was not selected for publication in the New Mexico Reports. Please
2 see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions.
3 Please also note that this electronic memorandum opinion may contain computer-generated
4 errors or other deviations from the official paper version filed by the Court of Appeals and does
5 not include the filing date.
6 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
7 MANUEL HERNANDEZ,
8 Worker-Appellee,
9 v. No. 30,279
10 DILLARDS, INC., and DISCOVER
11 RE PRIMARY WORK COMP. c/o
12 GALLAGHER BASSETT,
13 Employer/Insurer-Appellant.
14 APPEAL FROM THE WORKERS’ COMPENSATION ADMINISTRATION
15 Gregory D. Griego, Workers’ Compensation Judge
16 Gordon E. Berman
17 Las Cruces, NM
18 for Appellee
19 Hale & Dixon, P.C.
20 Timothy S. Hale
21 Albuquerque, NM
22 for Appellant
23 MEMORANDUM OPINION
24 SUTIN, Judge.
1 Employer appeals from the workers’ compensation judge’s (WCJ’s) order
2 awarding Worker legal fees on Worker’s application for bad faith penalties. Employer
3 raised two issues in its docketing statement: (1) the WCJ erred in his determination
4 that Employer acted in bad faith, and (2) the WCJ erred in relying on evidence
5 produced at trial and should have permitted an additional discovery period on the
6 issue of bad faith. [DS 4] This Court issued a notice of proposed disposition noting
7 that Employer appeared to raise the same issues in this appeal as Employer had raised
8 in its appeal from the compensation order in Hernandez v. Dillards, Inc., No. 30,278,
9 slip op. at 6-8 (N.M. Ct. App. July 26, 2010). We therefore proposed to affirm for the
10 reasons set out in the calendar notice issued by this Court in Case No. 30,278. Both
11 parties filed memorandums in response to this Court’s notice of proposed disposition.
12 Having considered the responses of both parties, we affirm.
13 The WCJ entered an order awarding Worker benefits on November 9, 2009.
14 [RP 176] Worker thereafter filed an application for a bad faith determination. [RP
15 184-85] A second compensation order was issued by the WCJ on February 19, 2010,
16 in which the WCJ awarded Worker a twenty-five percent increase in benefits based
17 on Employer’s bad faith denial of Worker’s claim. [RP 244-45] Employer appealed
18 from this order in Case No. 30,278. [RP 247] This Court affirmed the WCJ’s
19 determination in an opinion entered on July 26, 2010.
2
1 Following the entry of the second compensation order, the WCJ entered an
2 order on March 3, 2010, awarding Worker attorney fees for the prosecution of his bad
3 faith claim. [RP 246] Employer appeals from this order in the present case. In this
4 Court’s notice of proposed disposition, we noted that “except for indicating this is an
5 appeal from an award of attorney fees, Employer has raised the same issues as in its
6 appeal from the compensation order—that it should have been provided additional
7 discovery and that the bad faith determination was error.” [CN 3] We also noted that
8 our Court had addressed those issues in Employer’s appeal from the second
9 compensation order in Case No. 30,278. [Id.]
10 In its memorandum in opposition, Employer challenges the WCJ’s award of
11 legal fees for Worker’s bad faith claim on the grounds that Employer had a reasonable
12 basis to refuse to pay Worker’s claim—its desire to challenge the current status of the
13 law that would award Worker benefits for aggravation of a pre-existing injury. [MIO
14 1] Employer argues that, as a result, its actions were not reckless, motivated by fraud,
15 malice or oppression, and were not in reckless disregard of Worker’s rights. [Id.]
16 Employer made the same argument in support of its challenge to the twenty-five
17 percent increase in benefits received by Worker. Employer does not argue that the
18 WCJ’s determination of bad faith for the legal fee award is any different from the
19 WCJ’s determination that bad faith supported the increase in benefits, despite this
3
1 Court’s proposal to rely on the same analysis in our notice of proposed disposition.
2 We therefore look to this Court’s memorandum opinion addressing Employer’s bad
3 faith arguments in Case No. 30,278, which provides as follows.
4 In its memorandum in opposition, Employer argues that the law
5 requiring an employer to pay for the aggravation of long-standing,
6 preexisting injuries should be overturned. It further admits that it
7 “recognizes the long-standing law,” but argues that asking a court to
8 review and revisit the law does not constitute bad faith.
9 While we agree that simply requesting a court to revisit precedent
10 would not constitute bad faith, we cannot approve the method by which
11 Employer sought to challenge the precedent in this case. We see no
12 reason why Employer could not itself have filed a claim to resolve the
13 dispute while paying benefits under protest and have appealed from an
14 adverse decision. See, e.g., NMSA 1978, § 52-5-5(A) (1993) (permitting
15 any party to file a claim where a dispute arises under the Act); Salazar
16 v. Torres, 2007-NMSC-019, ¶ 17, 141 N.M. 559, 158 P.3d 44917 (reiterating that any party may file a claim to make a determination as to
18 benefits); State v. Cherryhomes, 114 N.M. 495, 498-99, 840 P.2d 1261,
19 1264-65 (Ct. App. 1992) (noting a duty to comply with court orders until
20 vacated or reversed on appeal). Or, Employer might have done the same
21 in the proceeding initiated by Worker’s claim. Perhaps Employer could
22 have sought a stay of any obligation to pay benefits pending appeal.
23 Specific procedures are available to ensure the status quo during appeal.
24 See, e.g., NMSA 1978, § 52-5-8(B) (1989) (stating that decisions by
25 workers’ compensation judges are subject to stay proceedings as outlined
26 in the Rules of Civil Procedure for the District Courts); see also Rule 1-
27 062(D) NMRA (permitting an appellant to post a supersedeas bond and
28 obtain a stay during appeals proceedings).
29 Here, however, Employer simply ceased all payments to Worker
30 in January 2009, even though it admittedly knew it was responsible for
31 the costs associated with Worker’s injuries under the law in place at the
32 time of Worker’s injury. Employer essentially argues it is not required
4
1 to comply with those laws with which it disagrees and should not be held
2 to have placed itself at risk of a claim of bad faith. We cannot agree.
3 Moreover, we decline Employer’s invitation to overturn the
4 longstanding rule regarding payment for the aggravation of preexisting
5 conditions. We note both that we are bound by Supreme Court precedent
6 and also that we have no concerns with the application of that precedent
7 because we believe the current case law on the aggravation of preexisting
8 conditions accurately represents the underlying policy considerations of
9 the Act. State ex rel. Martinez v. City of Las Vegas, 2004-NMSC-009, ¶¶
10 20-22, 135 N.M. 375, 89 P.3d 47 (explaining that the Court of Appeals
11 is bound by Supreme Court precedent but may alert the Supreme Court
12 to any reservations it might have concerning the application or viability
13 of that precedent). We therefore agree with the WCJ that Employer was
14 without a reasonable basis to deny Worker’s claim.
15 Hernandez, No. 30,278, slip op. at 6-8. For these reasons, we reject Employer’s
16 reasonable-basis argument and affirm the WCJ’s award of attorney fees. To the extent
17 Employer had put forward an argument regarding the prohibition of additional
18 discovery on the issue of bad faith, Employer has not addressed this argument in its
19 memorandum in opposition and we therefore deem it abandoned. See, e.g., Frick v.
20 Veazey, 116 N.M. 246, 247, 861 P.2d 287, 288 (Ct. App. 1993) (explaining that the
21 “[f]ailure to file a memorandum in opposition constitutes acceptance of the disposition
22 proposed in the calendar notice”).
23 For the reasons stated in this opinion and in this Court’s notice of proposed
24 disposition, we affirm.
5
1 IT IS SO ORDERED.
2 __________________________________
3 JONATHAN B. SUTIN, Judge
4 WE CONCUR:
5 _________________________________
6 ROBERT E. ROBLES, Judge
7 _________________________________
8 LINDA M. VANZI, Judge
6