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Leger v. Leger

Court of Appeals of New Mexico

November 28, 2018

NICHOLAS T. LEGER as assignee OF PRESBYTERIAN HEALTHCARE SERVICES, and JOHN OR JANE DOES 1-5, Defendants/Third-Party Plaintiffs-Appellees,
RICHARD GERETY, M.D., and I NEW MEXICO HEART INSTITUTE, Third-Party Defendants-Appellants.


          The Vargas Law Firm, LLC Ray M. Vargas, II Albuquerque, NM Carter & Valle Law Firm Richard J. Valle Criostoir O'Cleireachain Albuquerque, MM for Appellees

          Lorenz Law Alice T. Lorenz Albuquerque, NM Atwood, Malone, Turner & Sabiri, P.A. Lee M. Rogers Carla Neusch Williams Roswell, NM for Appellants



         {¶1} This interlocutory appeal presents a question of first impression concerning assignment, of claims for compensation covered by the Medical Malpractice Act. (the MMA or the Act), NMSA 1978, §§ 41-5-1 to -29 (1976, as amended, through 2015), In the litigation below, plaintiffs sued, a hospital on claims subject to the MMA based, in part, on allegations of malpractice by a physician not employed by the hospital for which plaintiffs claimed the hospital was vicariously liable. After the hospital filed a third-party complaint for equitable indemnification against the physician and his employer, in compliance with the MMA's requirements concerning pre-filing review and decision by the Medical Review Commission, plaintiffs successfully moved for orders staying that action and preventing the third-party defendants from participating in discovery in plaintiffs5 case against the hospital, arguing (among other things) that plaintiffs had chosen not to sue the third-party defendants and had no interest in the hospital's indemnification claim. Nevertheless, one plaintiff acquired the hospital's indemnification claim by assignment in settling plaintiffs' case against the hospital and then moved to lift the stay and take over as third-party plaintiff on that claim.

         {¶2} The question presented is whether the hospital's assignment of its indemnification claim to one of the plaintiffs is barred by the MMA's prohibition against assignment of "[a] patient's claim for compensation under the [MMA, ]" Section 41-5-12, or the common law. Applying New Mexico precedents concerning statutory construction-in particular, precedents construing the MMA-we conclude that the Legislature intended the MMA's requirements and restrictions to apply to all "malpractice claims" covered by the MMA and hold that Section 41-5-12 bars assignment of all "malpractice claims" for compensation covered by the MMA. One of these precedents, Wilschinsky v. Medina, 1989-NMSC-047, ¶ 26, 108 N.M. 511, 775 P.2d 713, held that "the [Legislature intended to cover all causes of action arising in New Mexico that are based on acts of malpractice.” Further, Christus St. Vincent Regional Medical Center v. Duarie-Afara, 2011-NMCA-112, ¶¶ 1, 14-20, 267 P.3d 70, made clear that the character of an indemnification claim under the common law as "separate and distinct from the underlying tort" does not control determination of whether the MMA's requirements and restrictions apply. Our statutory construction analysis is dispositive of this appeal, regardless of how a claim not covered by the MMA would he treated under the common law. Our conclusion concerning the assignment issue obviates the need to resolve other issues discussed by the parties.


         {¶3} This appeal arises from a. complaint asserting claims for wrongful death, negligence, and medical malpractice filed by Nicholas T. Leger, as Personal Representative for the Estate of Michael Thoemke, and Daniel Thoemke, individually (collectively, Plaintiffs), against Presbyterian Healthcare Services (PHS) after Michael Thoemke died at Presbyterian Hospital Although the complaint did not name Dr. Richard Gerety as a defendant, it included allegations concerning Dr. Gerety 's conduct in consulting on Michael's case while "acting within the course and scope of his employment, or acting as the agent or ostensible agent of [PHS, ]" In answering the complaint, PHS admitted that Dr. Gerety consulted on Michael's case but denied allegations that Dr. Gerety was PHS's cardiothoracic surgeon and that Dr. Gerety acted within "the course and scope of his employment, or act[ed] as the agent or ostensible agent of [PHS]."

         {¶4} After obtaining review and decision by the Medical Review Commission (as required for malpractice claims against a health care provider covered by the MMA, see §§ 41-5-5, -14, -15(A)) and the district court, "s leave to file, PHS filed a third-party complaint against Dr. Gerety and his employer, New Mexico Heart Institute (NMHI) (collectively, Appellants), stating, "[I]n the event that Dr. Gerety is found negligent in [this] suit, and in the event that PHS is found to be vicariously liable for the conduct of Dr. Gerety, then PHS is entitled to indemnification from [Appellants] for all fees, expenses, judgments, settlements and any and all other damages reasonably related to the alleged conduct of Dr. Gerety." In answering the third-party complaint, Appellants denied that Dr. Gerety was negligent and that PHS "is vicariously liable for the alleged acts and omissions of Dr. Gerety" and alleged affirmative defenses.

         {¶5} Plaintiffs moved to sever or bifurcate and stay the third-party complaint, arguing (among other things) that PHS's suit "is contingent upon a jury first finding that PHS is liable for the death of Michael Thoemke, and that PH-S\s liability is based, in whole or in part, upon the acts or omissions of [Appellants]”; "Plaintiffs have no interest in the outcome of PHS'[s] common law indemnification claims"; "Plaintiffs should not be dragged into a dispute that does not involve them, and that is not yet perfected or ripe"; "[n]othing in the law requires Plaintiffs to sue those third parties and Plaintiffs here have chosen not to"; "Plaintiffs have no standing or interest in any post-judgment indemnification claims brought by PHS against third parties"; and the indemnification claim would not accrue unless Plaintiffs obtained a judgment against PHS, Plaintiffs also moved for a protective order from discover propounded by Appellants, arguing again that Plaintiffs did not sue Appellants and "have no interest or stake” in the third-party action, and that PHS's indemnification claim had not accrued. The district court granted both motions, and denied PHS's later motion to reconsider the order granting severance and stay.

         {¶6} Plaintiffs ultimately settled their claims against PHS, and the district court dismissed those claims with prejudice. As part of that settlement, PHS assigned to Nicolas T. Leger, as Personal Representative of the Wrongful Death Estate of Michael Thoemke:

Any and all rights, claims, and causes of action of [PHS] against [Appellants] arising out of claims for indemnification, contribution, or any other rights or claims arising out of [PHS's] payment of defense fees, defense costs relating to claims of medical negligence against [Appellants], and payment of any amounts, including payments made in settlement to ... . Plaintiffs in the matter known as Leger et al v. Presbyterian Healthcare Services, . . . including the claims brought by [PHS] against [Appellants] in the May 21, 2013 [t]hird-[p]arty [c]omplaint for indemnification filed, therein.

         {¶7} Following the settlement, Leger moved to lift the stay of PHS's third-party complaint and for leave to file an amended third-party complaint, stating, "Now that the underlying case is fully resolved, and the [t]hird [p]arty claims assigned to Leger, the time has come for the stay of the [t]hird. [p]arty [a]ction to be lifted, and. that action to proceed to trial"

         {¶8} In separate responses, Appellants did not oppose the request to lift the stay hut opposed the motion to amend (with NMHI adopting Dr. Gerety's arguments while asserting additional arguments). As relevant here, Dr. Gerety argued that the indemnification claim is "a claim, for compensation under the [MMA]" and a "medical malpractice claim" that is "covered by all of the regulatory aspects of the [MMA]."' and that Section 41-5-12 (prohibiting assignment of "[a] patient's claim for compensation under the [MMA]") should not be interpreted "to prohibit assignments only by patients" but to prohibit assignment of malpractice claims governed by the MMA, consistent with legislative intent as interpreted by New Mexico case law. He also argued that the common-law prohibition against assignment of personal injury claims prohibits assignment; Leger cannot recover more than the maximum permitted by Section 41 -5-6, and allowing Leger to recover on the indemnification claim would increase costs to the healthcare system; Leger's recovery on the indemnification claim is barred by public policy against double recovery; and having chosen not to present a claim to the Medical Review Commission (presentation requirement), not to sue Dr, Gerety, and to obtain an order severing and staying the third-party action, Leger should not be allowed to prosecute the claim after the expiration of the MMA's statute of repose (Section 41-5-13).

         {¶9} Leger's reply to Dr. Gerety's response argued (among other things) that assignment is not barred because the assignment transferred "an interest in property and is common in commercial enterprises"; the indemnification claim, "while subject to provisions of the [MMA], is separate and distinct from the original claims of personal injury/bodily injury"; and the indemnification claim is not a "patient's" claim for compensation falling within the MMA's anti-assignment provision because PHS does not meet the MMA's definition of "patient" as "a natural person" under Section 41-5-3(E). Leger also argued that there would be no double recovery because the assignment gave Leger "the property rights to any recovery PHS is entitled to" and "PHS has not obtained any recovery in this matter" and that neither the MMA's presentation, requirement nor the MMA's statute of repose barred Leger's prosecution of the indemnification claim because PHS had satisfied both requirements and the proposed amendments to the third-party complaint were non-substantive changes that relate back to the original PHS filing.

         {¶10} After the district court granted his motion, Leger, "as [a]ssignee of [PHS]." filed an amended third-party complaint, asserting that PHS is entitled to indemnification if Dr. Gerety is found negligent and PHS is found vicariously liable for Dr. Gerety's conduct, and that "PHS has paid out sums due to its vicarious liability for Dr. Gerety's actions and omissions and is therefore entitled to indemnification."

         {¶11} Appellants moved to dismiss Leger's amended third-party complaint, arguing again that PHS's indemnity claim is a claim, for compensation covered by the MMA's anti-assignment provision and common-law prohibition against assignment of personal injury claims and, even assuming a lawful assignment, the claim was barred by Legers failure to comply with the MMA's presentation requirement and statute of repose. In opposing the motion, Leger reiterated his prior arguments that the assignment is not barred by the common law because the assignment did not transfer a personal injury claim but "an interest in an equitable/monetary claim and is common in commercial enterprises'" or prohibited by the MMA, and that the MMA's presentation requirement and statute of repose had been satisfied by PHS.

         {¶12} Appellants also moved for summary judgment on the ground that Leger could not meet the requirements necessary to prevail on an indemnification claim, in part;, because the settlement agreement with PHS did not discharge the liability of Appellants and so did not "buy peace” for them. In opposing that motion, Leger repeatedly stated that PHS intended "to discharge all tortfeasor liability to original Plaintiffs;” including "for the actions of [Appellants, ]” and that the "[r]elease discharges liability for the underl[y]ing tort concerning all agents (past, present, actual ostensible and borrowed).” Leger stated further:

Because PHS paid amounts to cover 100% of the underlying liability claim, original Plaintiffs could no longer maintain suit against [Appellants] in the underlying case. To do so would violate the principle against double recovery. See Sunnyland Farms, Inc. v. Central New Mexico Elec. Coop, Inc.[, ] 2013-NMSC-017');">2013-NMSC-017, [¶ 47, ] 301 P.3d 387 (["] In general, plaintiffs may not collect more than the damages awarded to them, or, put another way, they may not receive compensation twice for the same injury[."]). As such, when. PHS settled the case for the entire value of the case, by operation of law, original Plaintiffs were precluded from bringing suit against other Defendants in the underlying tort claim ., . [and] once the original, underlying Plaintiffs could no longer maintain suit against [Appellants], [Leger and PHS were] entitled to seek indemnification, ...[B]y operation of law, there is no more recovery available from [Appellants] to the original, underlying Plaintiff[s]. As a result of the extinguishment: of [Appellants'] liability to the original, underlying Plaintiffs ['] claims, [Leger and PHS are] now able to go forward with the indemnification claims,

         Leger also stated that "[Appellants'] liability to the original, underlying Plaintiffs in the underlying case was discharged by operation of law" because Plaintiffs had not brought "direct claims against [Appellants]" within the statute of repose. The reply arguments of Appellants included the following:

[T]he [c]ourt should not validate the assignment or allow Leger to circumvent the [MMA] by choosing not to sue Dr, Gerety, convincing the [c]ourt and Dr. Gerety that he had no interest in the indemnity action and excluding Dr. Gerety from participating in the underlying case, then extracting from PHS an[] assignment of its indemnity claim, all in order to collect 100% of his damages from PHS and then recover the same damages from Dr. Gerety. . . . To allow patients to obtain 100% of their damages from one healthcare provider, and then demand an assignment of that provider's indemnity claim, against another provider, in order to allow the patient to obtain more than 100% of his damages, would frustrate the purpose of the Act and simply add to the overall cost of delivering health care as plaintiffs 'double dip' their claims.

         {¶13} The district court denied Appellants' motions in. a. letter decision. In denying the motion for summary judgment just discussed, the court stated that "[P]laintiffs, by settling with PHS and executing the [r]elease settled any and all claims that [P]laintiffs had against PHS, [Appellants] and, thereby 'bought peace' for [Appellants] as to all of the underlying claims brought by [P]laintiffs against PHS, Dr. Gerety and NMHI[.]" The court also stated that Leger's prosecution, of the indemnification claim "will not violate the prohibition against double recovery as [P]laintiffs have fully recovered what they could for their claims" and the damages they seek to recover from Appellants through the assignment are "not for the underlying claims brought by original [P]laintiffs, but for indemnification as a result of the damages PHS paid to [P]laintiffs for the negligence of [Appellants], which claim[s are] separate and distinct from the claims made by [P]laintiff[s] in the underlying cause of action[.]"

         {¶14} In denying the motion to dismiss discussed above, the court: stated that "the indemnity claims in this matter are assignable because they are not personal injury claims." but claims "separate and distinct from the underlying tort5' and that the MMA's presentation requirement and statute of repose were satisfied by PHS. In a separate order, the district court, certified for interlocutory review the "issues of whether . . . the common law and/or [Section] 41-5-12 . . . prohibits the assignment of an indemnity claim against a qualified healthcare provider." Appellants filed an application for interlocutory review, which this Court granted.


         A. Principles of Statutory Construction

         {¶15} Statutory construction is a. question of law that we review de novo. Baker v. Hedstrom, 2013-NMSC-043, ¶ 10, 309 P.3d 1047. "When construing statutes, our guiding principle is to determine and give effect to legislative intent." Id., ¶ 11 (internal quotation marks and citation omitted); see State ex rel. Helman v. Gallegos, 1994-NMSC-023, ¶ 25, 117 N.M. 346, 871 P.2d 1352 ([W]e believe it to be the high duty and responsibility of the judicial branch of government to facilitate and promote the [Legislature's accomplishment of its purpose-especially when such action involves correcting an apparent legislative mistake."); see also In re Portal, 2002-NMSC-011, ¶ 5, 132 N.M. 171, 45 P.3d 891 ("Statutes are to be read in a way that facilitates their operation and the achievement of their goals." (internal quotation marks and citation omitted)); D'Avignon v. Graham, 1991-NMCA-125, ¶ 11, 113 N.M. 129, 823 P.2d 929 (explaining that "the cardinal rule of statutory construction is to determine legislative intent" and that New Mexico courts "have rejected formalistic and mechanistic interpretation of statutory language").

         {¶16} In performing this duty, we must consider the provisions at issue "in the context of the statute as a whole, including the purposes and consequences of the Act." Baker, 2013-NMSC-043, ¶ 15; see State v. Rivera, 2004-NMSC-001, ¶ 13, 134 N.M. 768, 82 P.3d 939 (stating that courts must analyze a "statute's function within a comprehensive legislative scheme" and may not consider subsections "in a vacuum" (internal quotation marks and citation omitted)); Key v. Chrysler Motors Corp., 1996-NMSC-038, ¶ 14, 121 N.M. 764, 918 P.2d 350 ("[A]ll parts of a statute must be read together to ascertain legislative intent. We are to read the statute in its entirety and construe each part in connection with every other part to produce a. harmonious whole." (citation omitted)).

         {¶17} "Rules of statutory construction dictate that when a statute's language is clear and unambiguous and it conveys a clear and definite meaning, the statute must be given its plain and ordinary meaning.” Key, 1996-NMSC-038, ¶ 13. Our Supreme Court has admonished, however, that "courts must exercise caution in applying the plain meaning rule" because "[i]ts beguiling simplicity may mask a host of reasons why a statute, apparently clear and unambiguous on its face, may for one reason or another give rise to legitimate (i.e., nonfrivolous) differences of opinion concerning the statute's meaning." Helman, 1994-NMSC-023, ¶ 23; see Baker, 2013-NMSC- 043, ¶ 15 (citing Helman for these "wise words of caution in applying the plain. meaning rule").

         {¶18} Helman discussed at length the "plain meaning" and "rejection-of-literal- language" approaches to statutory construction, explaining that "the two approaches, correctly understood, can be viewed as complementary, not contradictory." 1994- NMSC-023, ¶¶ 1-3, 18-26. The Court affirmed that "if the meaning of a statute is truly clear.......not vague, uncertain, ambiguous, or otherwise doubtful-it is of course the responsibility of the judiciary to apply the statute as written." Id. ¶ 22. "But where the language of the legislative act is doubtful or an adherence to the literal use of words would lead to injustice, absurdity or contradiction, the statute will be construed according to its obvious spirit or reason, even though this requires the rejection of words or the substitution of others." Id. ¶ 3 (internal quotation marks and citations omitted). The Court explained:

In such a case, it can rarely be said that the legislation is indeed free from all ambiguity and is crystal clear in its meaning. While . . . one part of the statute may appear absolutely clear and certain to the point of mathematical precision, lurking in another part of the enactment, or even in the same section, or in the history and background of the legislation, or in an apparent conflict between the statutory wording and he overall legislative intent, there may he one or more provisions giving rise to genuine uncertainty as to what the [Legislature was trying to accomplish. In such a case, ...

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