Baca v. State
34,640
N.M. Ct. App.Jun 21, 2017Background
- Worker (Don R. Baca) and Employer (State/Risk Management) executed a stipulated compensation order (SCO) on Aug. 4, 2004, awarding PPD benefits and a $60,000 partial lump-sum to Worker with remaining periodic payments.
- No hearing was held to approve the SCO, and the record lacks evidence the WCJ confirmed Worker’s understanding of the lump-sum.
- Worker had further back surgeries in 2010–2011; Employer later paid additional indemnity benefits (~$92,530.72) without a modification order.
- In 2014 Employer filed a motion for supplemental compensation order (MSCO) and sought a credit for alleged overpayments; WCJ ruled the SCO enforceable and ordered Worker to reimburse Employer for the overpayment.
- Worker appealed, arguing the SCO was unenforceable because it (a) included an improper partial lump-sum not authorized by statute, (b) lacked required WCJ review/hearing, and (c) should be modified or set aside under controlling precedents.
Issues
| Issue | Plaintiff's Argument (Baca) | Defendant's Argument (State) | Held |
|---|---|---|---|
| Whether the SCO’s $60,000 partial lump-sum complied with §52-5-12(C) | Lump-sum unsupported by evidentiary showing of debts/need; SCO invalid | Parties bargained to settle; SCO should be enforced as written | SCO did not comply with §52-5-12(C); WCJ lacked authority to approve that lump-sum; SCO unenforceable |
| Whether WCJ approval procedures (§§52-5-13, -14) and a hearing were required | Lack of hearing and lack of statutory review rendered SCO unenforceable | Sommerville should be limited; WCJ had discretion and approval may be enforced retroactively | WCJ failed to follow statutory review/approval duties; without compliance SCO unenforceable |
| Retroactivity of Sommerville’s strict approval rule | Sommerville applies to preserve statutory policy favoring periodic payments | Sommerville should be applied only prospectively/when claimant unrepresented | Sommerville applies retroactively; its rule is statutory interpretation and not a new unforeseen rule |
| Employer’s right to credit/recoup post‑SCO payments as overpayment | Employer waived right or should be subject to equitable defenses due to SCO defects | Employer may seek credit for mistaken/unauthorized overpayments | Because SCO was unenforceable, WCJ erred in granting MSCO and ordering reimbursement; matter remanded for further proceedings |
Key Cases Cited
- Sommerville v. Southwest Firebird, 188 P.3d 1147 (N.M. 2008) (WCJ must strictly follow WCAA review/approval requirements for lump-sum settlements; noncompliant agreements are unenforceable)
- Benny v. Moberg Welding, 167 P.3d 949 (N.M. Ct. App. 2007) (statutory provisions should not be rendered surplusage; courts must honor statutory scheme)
- Paradiso v. Tipps Equip., 82 P.3d 985 (N.M. Ct. App. 2004) (Legislature set clear policy limiting lump-sum payments; courts enforce statutory limits)
- Quintana v. Ilfelds, 867 P.2d 1218 (N.M. Ct. App. 1993) (partial lump-sum under §52-5-12(C) was unenforceable and periodic payments reinstated)
- Cabazos v. Calloway Constr., 879 P.2d 1217 (N.M. Ct. App. 1994) (partial lump-sum payments must be carefully scrutinized to protect worker’s future needs)
- Marckstadt v. Lockheed Martin Corp., 228 P.3d 462 (N.M. 2010) (factors for determining retroactive vs. prospective application of appellate decisions)