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Gutierrez v. City of Albuquerque8/25/1998
nt should occur until the amount received in compensation benefits and from the tort recovery exceeds her total tort damages. She reasons that until made "whole," there is no windfall. We disagree. This approach unfairly requires an employer to participate in making the injured worker "whole," which is contrary to legislative intent. Cf. NMSA 1978, ยง 52-1-8 (1973) (employer who has complied with the Act shall not be subject to any other liability to a worker). The important differences between the purpose and scope of tort recovery damage elements and the purpose and scope of workers' compensation require that the Judge look for duplication or windfall as to each element of each recovery.
5. The Method Employed by the Workers' Compensation Judge
{26} Worker in the alternative claims that an employer has an equitable right of subrogation under Section 52-5-17, and the Judge correctly valued that interest in her case. While we agree that the statute creates a subrogated interest, we are concerned that in other cases the Judge's allocation method might include elements of damage for which Employer paid nothing, and might fail to take into consideration the percentage of lost earnings paid by Employer. Thus the method of allocation may not accurately reimburse "to the extent of payment. . . by the employer" as required by the statute.
{27} The method used by the Judge was to allocate to Employer a percentage of its outlay equal to the percentage of Worker's damages received in tort. The Judge found the Worker's tort settlement covered 38% of Worker's total tort damages, then awarded Employer 38% of its compensation outlay. If a worker settles for a partial tort recovery, the Judge's method would always result in the employer receiving only a proportionate part for its wages and medical expenses outlay. Under our method, in contrast, the employer may well receive a full reimbursement for the benefits it paid despite the fact that a worker's tort recovery was partial, if the worker cannot show that the tort proceeds were intended to cover a non-compensated injury . Absent such a showing, we find no nexus or connection between the degree to which a worker's tort recovery remedies the totality of her injuries and the extent of the employer's right to reimbursement.
III. Conclusion
{28} We hold that an employer is not necessarily entitled to a full reimbursement from a worker's fair but partial tort recovery. Instead, an employer is entitled to recoup the amount of a worker's duplicative recovery. Those monies a worker reasonably receives in tort to compensate for injuries not addressed by workers' compensation are beyond the reach of the employer. We therefore reverse the decision of the Court of Appeals, and remand this matter to the workers' compensation Judge for proceedings consistent with this opinion.
{29} IT IS SO ORDERED.
DAN A. McKINNON, III, Justice
WE CONCUR: GENE E. FRANCHINI, Chief Justice PATRICIO M. SERNA, Justice
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