Ritter v. Albuquerque Gas Electric Co. , 47 N.M. 329 ( 1943 )

It is the public policy of this state, expressed in the Workmen's Compensation Act, that the employer "shall becomeliable to, and shall pay any such workman injured by accident," etc., Sec. 57-902 N.M. Sts. 1941, "the compensationprovided for in this act" where the employer and employee are subject to the act and the employee is injured by accident while performing services arising out of and in the course of his employment, Sec. 57-906, N.M.Sts. 1941. In all cases where specific amounts for injuries are not provided for, compensation is determined upon the basis of the employee's average weekly wage, and is a mere matter of calculation when the character and extent of the injury are determined. If the compensationprovided for in the act is not paid after statutory notice, or without it if no notice is required, it becomes the duty of the workman to file a claim therefor with the clerk of the district court against the employer and his surety, who are allowed twenty days within which to settle the claim, or answer. (Italics mine)

"In event, prior to the expiration of such time last named (20 days) the defendants, or any of them, shall file in the office of such clerk, a written final settlement adjustment or release signed by such plaintiff and defendants, then and in such event a judgment shall under order of court be entered of record in accordance with such settlement, and carrying the same into effect and providing for the execution or executions to be issued thereunder for any future payments therein provided, which judgment may, with the approval of the court, be satisfied of record if, by such instrument or instruments, it is shown that full payments have already been made." Sec. 57-913 N.M.Sts. 1941.

This character of settlement or adjustment contemplates that there had been a bona fide refusal to pay the employee theamount due him because of an accidental injury; that he had filed his claim because of such failure to pay; that notice (if required) had been given the employer of the filing of such claim, and that thereafter a settlement or adjustment had been made between the parties.

Adjust means "to settle or arrange; to free differences or discrepancies; to bring to a satisfactory state so that parties are agreed; as to adjust accounts." Settlement means "act or process of adjusting or determining; composure of doubts or differences; arrangement; adjustment; as settlement of a controversy, of accounts; also condition of affairs thus adjusted." Webster's New International Dictionary.

Or, in other words, a mutual determination of the amount due the injured employee under the provisions of the Workmen's Compensation Act. It makes no provision for a compromise, payment in lump sum, or in any other way, or for any other amounts than that provided by law.

If this statute authorizes a binding compromise settlement without the approval of the court after the filing of a claim (a question that need not be decided), then this is true because the employee, upon the filing of a bona fide claim, is, in practically all cases, represented by counsel whom the legislature has assumed is capable of caring for the employee's interests.

But there is another statute that specifically authorizes compromises. It is as follows: "The district court in which the right to compensation provided herein is enforceable shall at all times have the right and power to authorize, direct or approve any settlement or compromise of any claim for compensation hereunder by any injured workman or his personal representative or dependents, or any person appointed by the court to receive payment of the same, for such amount and payable in installments or lump sum or in such other way and manner as the court may approve." Sec. 57-925 N.M.Sts. 1941.

The majority opinion in effect holds that this provision of the Workmen's Compensation Act is ineffective. It annuls the statute.

It either means nothing as the majority hold, or it is a mandatory statute which requires the approval of the court to effectuate a valid settlement or compromise. If settlements and compromises may be made without the court's approval, then the statute is utterly void and meaningless as the majority, in effect, hold, and the legislature did a vain and useless thing; for if the parties are permitted to settle and compromise claims without the approval of the court there is no object or necessity for procuring an approval that is legally ineffective. No such construction is authorized if a purpose for its enactment can be discovered.

It is asserted that the statute has no reference to "settlements and compromises voluntarily made between the parties and without the jurisdiction of the court, but only to claims actually filed and appropriately before the court." If this is true then the statute is a duplication. Compromises or settlements after claims are filed are provided for by the first statute quoted in this dissent. The fact that the authority is given to approve "at all times", negatives any such construction.

Many states have laws prohibiting settlements without the approval of some board or court, and a number of these prohibit all compromises; that is, the employer must pay the statutory compensation to the injured employee.

But it is asserted that this statute does not in terms prohibit such settlement or compromise. True, but if it had, no construction would be necessary. It does, however, provide the manner in which settlements and compromises may be made, and this is a negation of any other mode.

Botany Worsted Mills v. United States, 278 U.S. 282,49 S. Ct. 129, 131, 73 L. Ed. 379, is a case in point. There an income tax was settled by subordinate officers. The statute provided that such settlements could be made with the advice of the Secretary of the Treasury and recommendation of the Attorney General. The question was whether it could be made in any other manner. It was held that when a statute limits a thing to be done in a particular mode it includes a negation of every other mode. The income tax had been compromised by subordinate officers in the bureau of internal revenue. The Supreme Court said: "We think that Congress intended by the statute to prescribe the exclusive method by which tax cases could be compromised, requiring therefor the concurrence of the Commissioner and the Secretary, and prescribing the formality with which, as a matter of public concern, it should be attested in the files of the Commissioner's office; and did not intend to intrust the final settlement of such matters to the informal action of subordinate officials in the Bureau. When a statute limits a thing to be done in a particular mode, it includes the negative of any other mode."

In Fancher v. County Com'rs, 28 N.M. 179, 210 P. 237, the statute provided that an index of the recorded instruments could be made by the county clerk. It was held that the commissioners were not authorized to employ a private individual to make the index. There was quoted in said case (page 189 of 28 N.M., page 241 of 210 P.) the following from Lewis Sutherland's Statutory Construction: "Where authority is given to do a particular thing and the mode of doing it is prescribed, it is limited to be done in that mode; all other modes are excluded. This is a part of the so-called doctrine of expressio unius est exclusio alterius." Then this court said: "Thus by Section 4798, supra, we find that the county commissioners had the power to have a complete and accurate index made of all instruments of record affecting real property by the county clerk of the county, and that when so directed it would be the duty of the clerk to prepare the index. The rule of law thus made applicable is that the Legislature may prescribe the method for exercising the jurisdiction of the board of county commissioners, and where it prescribes the mode of procedure the rule is exclusive of all others and must be followed."

The majority cite Brigham Young University v. Industrial Comm.,74 Utah 349, 279 P. 889, 893, 65 A.L.R. 152, in support of their contention that a compromise made without the consent or approval of the district court binds the parties. The compromise in that case was made without the consent of the Industrial Commission of Utah, which it was asserted, could not be legally done. The Utah act as do those of a number of states, contains the provision: "No agreement by an employe to waive his rights to compensation under this title shall be valid * * *." It was held by the Utah court that the act "does not expressly or by necessary implication" prohibit a compromise settlement of a claim; that the code provision quoted had no reference to compromises. The court stated: "The section of the act referred to does not, in our judgment, support the view that the right of the employer and employee to settle a claim arising under the act after it has arisen is circumscribed or prohibited. The language `no agreement by an employe to waive his rights to compensation under this title shall be valid' does not expressly or by necessary implication declare such a prohibition. * * * It is a contradiction of terms to say that, when a present and existing claim is settled, the claim itself is abandoned, surrendered or relinquished — is waived. By making such a settlement, it in no sense may be said that the `rights to compensation under the' act were surrendered or waived. To the contrary, such rights were thereby asserted, affirmed, and recognized, not waived."

The Utah court's decision is based upon an entirely different statute which that court holds does not prohibit compromises, although this is in conflict with the holding of both the Texas and Illinois courts. But if it can be said that this case is authority for the views expressed by the majority, then its effect is greatly limited by a subsequent case of the same court (Barber Asphalt Corp. v. Industrial Comm., Utah, 135 P.2d 266) in which the holding that the compromise of a claim as authorized under the waiver statute was limited to cases like the one decided, where, as was stated in the Barber Asphalt case, there was grave doubt whether the employee was entitled to any compensation. The Utah court in the latter case makes reference to the decision of the same court in AEtna Life Insurance Co. v. Industrial Comm., 73 Utah 366, 274 P. 139, 142, in which the court expressed grave doubt as to whether any compromise was effective even though approved by the Industrial Commission "unless the compensation agreed upon and paid was all he [the employee] would be entitled to under the terms of the Industrial Act." It was said in the AEtna Life Insurance Company case: "The Utah statute does not provide for a settlement by agreement of the parties as do the statutes of the states referred to, and, in view of the evident purpose of the act, it is open to serious question whether an agreement made, and settlement had in pursuance thereof, even with the consent of the commission, would be binding upon an applicant for compensation unless the compensation agreed upon and paid was all he would be entitled to under the terms of the Industrial Act. The commission is an administrative body merely. Its duty is to administer the law applicable to the case and award such compensation as the law authorizes. However, it is not necessary to decide this question in the instant case. * * * Before leaving this question, it may be stated that, while our statute makes no provision for settling claims by agreement it does expressly provide. * * * `No agreement by an employee to waive his rights to compensation under this title shall be valid.'"

In commenting on the decisions of other states, the Utah court, in the Barber Asphalt case [135 P.2d 273], said: "Several states have compensation acts which give such authority [to compromise] to the industrial commission, and some of them provide for special procedure to procure such approval. It is generally held that where the commission is authorized to approve of compromisesettlements the settlement is binding when approved, but notbefore." (My emphasis) Citing International Coal Min. Co. v. Nicholas, 293 Ill. 524, 127 N.E. 703, 705, 10 A.L.R. 1010, in which the Illinois court said, "Such a settlement must be petitioned for as provided in section 9 of the act [Smith-Hurd Stats. c. 48, § 146] and must be approved by the Industrial Commission."

The Illinois statute is substantially the same as that of Utah. It provides: "No employee, personal representative, or beneficiary shall have power to waive any of the provisions of this act in regard to the amount of compensation which may be payable to such employee, personal representative or beneficiary hereunder except after approval by the Industrial Board." Smith-Hurd Stats. c. 48, § 160.

The Illinois court held that the employer could not relieve himself of liability under the Workmen's Compensation Act by contract with his employee. That the language of the act applied "with equal force here, where the employer is seeking to limit its liability by settlement in the nature of the lump sum payment. This cannot be done without the approval of the Industrial Commission."

In my judgment this construction of substantially the same statute as that of Utah is supported by the better reasoning.

If, in this particular case, the employee will be injured by my construction of the statute, nevertheless such construction will protect thousands of other employees against unjust and unrighteous settlements of claims by which they will be deprived of compensation to which they are legally entitled. Such a claim was before the Supreme Court of Texas in Woolsey v. Panhandle Refin. Co., 131 Tex. 449, 116 S.W.2d 675, 678, in which that court said: "It may be true that by refusing to enforce this contract injury may result to plaintiff. However, refusing to enforce the agreement of settlement involved here will be far less disastrous to the great army of employees operating under this statute than to hold that under the law an employee and an employer can contract away the rights of the employee. In line with the universally accepted rule, this court has repeatedly refused to enforce contracts which are either expressly or impliedly prohibited by statutes or by public policy."

It is the public policy of this state, expressed in the Workmen's Compensation Act, that an injured employee who is entitled to compensation shall be paid the amount provided by the statute, and for the purpose of securing to him that to which he is entitled, no settlement or compromise can be made without the approval of the district court, unless it may be in those cases in which bona fide claims have been filed. In such cases, almost without exception, employees are represented by counsel. Any contract in violation of this public policy is void. Woolsey v. Panhandle Refining Co., supra.

The judgment of the district court should be affirmed.