On June 5, 2014, the New Mexico Supreme Court issued an opinion in the case of Sherrie Fowler v. Vista Care and American Home Insurance Company, 2014-NMSC-019, 329 P.3d 630.  This was an appeal from a decision by Judge Victor Lopez and, subsequently, the Court of Appeals. My partners, Mr. David Whitham and Ms. Emily Franke, represented the Employer and insurance carrier in this matter.

The issue in this case was whether the 700-week limit for indemnity benefits applied to Temporary Total Disability (TTD) benefits. In this particular case the Worker, Ms. Fowler, had sustained a back injury in the course and scope of her employment and was receiving TTD benefits. She was later determined to have reached Maximum Medical Improvement (MMI) and was paid Permanent Partial Disability (PPD) benefits based on her reaching MMI.

Later, the Worker’s medical condition changed and she needed additional surgery and she requested additional TTD benefits. The Employer and the insurance carrier denied the request for additional TTD benefits, based on an argument that there was a 700-week “per injury” limit on disability benefits that the Worker was entitled to.

In his decision at the Workers’ Compensation Administration, Judge Lopez concluded that the TTD benefits were not subject to the 700-week durational limit found in NMSA 1978, Section 52-1-42(A) and, therefore, Ms. Fowler could be paid TTD benefits for an indefinite period of time over the course of her lifetime. The Court of Appeals reversed Judge Lopez’s decision on this point. See Fowler v. Vista Care and Am. Home Ins. Co., 2013-NMCA-036, ¶¶ 22-23, 298 P.3d 491. However, the Supreme Court, in a unanimous decision authored by Justice Charles Daniels, reversed the Court of Appeals and upheld the decision of Judge Lopez.

The basis of the Supreme Court’s affirmance of Judge Lopez’s opinion is a strict reading of language contained in Section 52-1-41(A), which states in part: “For total disability, the worker shall receive, during the period of that disability, . . . compensation benefits for the remainder of his life.” The Supreme Court confirmed that there are specific limits for PPD benefits, that their decision was not changing that particular limitation, and that their holding only applied to TTD benefits.

Justice Daniels stated:

The legislative history of Section 52-1-41 indicates that the Legislature intended the eligibility for total disability benefits to exist without limit on duration. In 1990 the Legislature amended Section 52-1-41, specifically removing the duration limits that previously applied to total disability compensation benefits. . . Also in 1990 when the Legislature amended Section 52-1-41 to remove the duration limits for total disability benefits from Subsection A, it enacted Section 52-1-25.1 expressly defining “temporary total disability.”

Fowler, 2014-NMSC-019, ¶¶ 18-19. It was Justice Daniels’ opinion that the Legislature’s removal of the duration limits from Section 52-1-41(A) in the same year that it expressly created “temporary total disability” as a new subsection of the definition for total disability “strongly suggests that the Legislature intended to classify both temporary total disability benefits and permanent total disability benefits as lifetime benefits.” Id. ¶ 20 (emphasis in original).

There was one aspect of Justice Daniels’ decision which appeared to me to be an incorrect statement of the law and showed, somewhat, a lack of understanding of how the workers’ compensation system works. Justice Daniels stated: “This scheme acknowledges the realistic possibility that some workers may become totally disabled for a period of time, reach MMI or be released for work by their physicians before MMI and return to work, and later face subsequent work-related injuries or find their existing injuries exacerbated, rendering them totally disabled yet again.” Fowler, 2014-NMSC-019, ¶ 10. As I am sure you are aware, if, in fact, a worker becomes reinjured after the worker returns to work, this would probably constitute a new injury, which means a new 700-week period would start all over again. I could not tell from reading that particular section of the opinion whether that fact was clear to Justice Daniels, although it probably would not have changed his opinion in this case, even if it were.

The significance of this case is that it may encourage employers and insurers to try to settle workers’ compensation cases under the Workers’ Compensation Act’s lump sum settlement provisions and to make sure there is language contained in the settlement pleadings that all “past, present and future claims for weekly indemnity benefits are waived, even if the worker’s condition worsens or changes in the future.” If a worker is being paid out his or her benefits on a periodic basis, which they are entitled to receive under the law, there is a risk that a subsequent, non-new-injury exacerbation or deterioration could result in additional treatment or even surgery, re-entitling them to TTD until reaching MMI again. Under Fowler, this could result in payment of additional TTD benefits well beyond 700 weeks of benefits for the exacerbated or deteriorated injury.

Fortunately, there are few cases in which a worker presents with a situation similar to that of Ms. Fowler. Additionally, this should not be an issue in cases of settlement, assuming that proper language forever closing out all indemnity benefits is included in the compensation order approving the settlement.