A-1-CA-38334 | Omnilex

Full text

Correctiorn to this opinion/deci5ion not affecting lhe outcome, at lhe Court's discretion, can occur up lo the time of publication
with NM Compilation Commission. The Comt will ensure tltat 1he elec1ronic version of this opinion/decision i5 updated accordingly
in Odyssey.
1 IN THE COURT O.F APPEALS Of' THE STATE Of' NE\V l\iIEXICO
2 Opinion Number:_ _ _ _ _	_
3 Filing Date: l'\1arch 9, 2023
4 No. A-1-CA-38334
5 llEECHER CARLSON INSURANCE
6 SER\7ICES, LLC and CALIFORNIA
7 NIEDICAL GROUP INSURANCE
8 COl'\rIPANY RISK RETENTION GROUP,
9 Plaintiffs-Appellants,
10 V.
11 JENNI.FER A. CATECHIS, as Superintendent
12 of Insurance for the State of New 1\/lexico,
13 Defendant-Appellee.
Court of Appeals of New Mexico
Filed 3/9/2023 1 ·1 :33 AM
I! .·.·.Ip .r-::>/4·. �4:::::.-.-.2o·-·· ;&';::'loOl&"."
14 APPl:AL F'R01\'1 THl: DISTRICT COURT OF SANTA .FE COUNTY
15 Francis .J. l'\riathew, District Court .Judge
16 J\lfadison, Mroz, Steinman, Kenny & Olexy, P.A.
17 \Villiam C. iVIadison
18 Gregory D. Steinman
19 Albuquerque, NJ\1
20 for Appellants
21 Office of Superintendent of Insurance
22 R. Alfred \Valker, Associate General Counsel
23 Santa Fe, NJvI
24 for Appellee

2
{2} The request for declaratory judgment was combined with an appeal from a 1
decision by OSI, following a hearing, refusing to accept the surcharge and refusing 2
to retroactively recognize DaVita as a qualified health care provider during the 3
relevant 2017 period. The district court first dismissed the declaratory judgment 4
claim with prejudice, and then upheld OSI’s decision on appeal. Plaintiffs now 5
appeal solely from the district court’s dismissal of their declaratory judgment claim, 6
arguing that they are entitled to a de novo interpretation of the Act. Finding no error, 7
we affirm the district court’s dismissal of Plaintiffs’ declaratory judgment claim. 8
DISCUSSION 9
{3} We note at the outset that the issue before us is limited. Plaintiffs appeal only 10
from the district court’s dismissal of their declaratory judgment claim. When 11
Plaintiffs filed that claim, however, they also appealed to the district court OSI’s 12
final order from an administrative hearing, which encompassed the same issues. The 13
district court affirmed OSI’s determination. Plaintiffs have not filed a petition for 14
certiorari seeking review of the district court’s decision on their administrative 15
appeal. They have instead filed only a direct non-discretionary appeal from the 16
dismissal of their declaratory judgment claim. See Victor v. N.M. Dep’t of Health, 17
2014-NMCA-012, ¶ 18, 316 P.3d 213 (requiring litigants seeking review of a district 18
court’s decision when it has exercised both its appellate and original jurisdiction to 19
“pursue an appeal by filing a Rule 12-505 [NMRA] petition to address issues 20

3
stemming from the exercise of the district court’s appellate jurisdiction, and a direct	1
appeal to address issues stemming from the exercise of the district court’s original	2
jurisdiction” (internal quotation marks and citation omitted)). Therefore, we limit	3
our review only to the district court’s dismissal of Plaintiffs’ declaratory judgment	4
claim.	5
Declaratory Judgment	6
{4} 	It was not error for the district court to dismiss Plaintiffs’ declaratory	7
judgment claim.2 Plaintiffs’ complaint sought a declaration that Section 41-5-25 of	8
the Act did not prevent Defendant from accepting the late surcharge and recognizing	9
DaVita as a qualified health care provider from June 2017 to December 2017, and	10
ordering Defendant to do so. Plaintiffs explain that the purpose of their claim was to	11
obtain 	de 	novo 	review 	of 	the 	Act, 	without 	any 	deference 	to 	Defendant’s	12
interpretation and implementation of it. This approach circumvented the typical	13
administrative process, a tactic which New Mexico courts have repeatedly looked at	14
with disfavor.	15
{5} 	“The district court is vested with broad discretion to grant or refuse claims for	16
declaratory relief.” Headen v. D’Antonio, 2011-NMCA-058, ¶ 6, 149 N.M. 667, 253	17
2 Defendant contends that Plaintiffs lack standing to sue for declaratory
judgment. In this case, where the district court dismissed the claim at the pleading
stage, we need not address Defendant’s contention, because even if we were to
assume, without deciding, that Plaintiffs have standing, their claim was still
appropriately dismissed.

4
P.3d 957 (internal quotation marks and citation omitted). Our review is thus limited 1
to whether the district court abused that discretion. Id. “[E]ven when we review for 2
an abuse of discretion, our review of the application of the law to the facts is 3
conducted de novo. Accordingly, we may characterize as an abuse of discretion a 4
discretionary decision that is premised on a misapprehension of the law.” Harrison 5
v. Bd. of Regents of Univ. of N.M., 2013-NMCA-105, ¶ 14, 311 P.3d 1236 (internal 6
quotation marks and citations omitted). 7
{6} A declaratory judgment action may be appropriate for challenging 8
administrative decisions “when the matter at issue (1) is purely legal, (2) requires no 9
specialized agency fact-finding, and (3) there is no exclusive statutory remedy.” New 10
Energy Econ., Inc. v. Shoobridge, 2010-NMSC-049, ¶ 12, 149 N.M. 42, 243 P.3d 11
746. However, our Supreme Court has cautioned against using declaratory judgment 12
claims to review administrative actions 13
if such an approach would foreclose any necessary fact-finding by the 14
administrative entity, discourage reliance on any special expertise that 15
may exist at the administrative level, disregard an exclusive statutory 16
scheme for the review of administrative decisions, or circumvent 17
procedural or substantive limitations that would otherwise limit review 18
through means other than a declaratory judgment action. 19
Smith v. City of Santa Fe, 2007-NMSC-055, ¶ 15, 142 N.M. 786, 171 P.3d 300. And 20
even if the issue in the case was purely legal, our Supreme Court has “held that a 21
party who initiated the appeals process in an administrative action could not use a 22
declaratory judgment action to circumvent the requirements of an administrative 23

5
appeal.” New Energy Econ., Inc., 2010-NMSC-049, ¶ 12. These limitations “on the	1
use of the declaratory judgment action respect the role of each branch of government	2
in the constitutional scheme and the administrative processes put in place by the	3
Legislature.” Id. ¶ 14.	4
{7} 	Here, 	Plaintiffs 	sought 	to 	circumvent 	those 	limitations 	by 	foreclosing	5
necessary fact-finding by OSI and discouraging the district court’s reliance on	6
Defendant’s administrative expertise. First, although Plaintiffs construe the issue in	7
this case as a purely legal one—an interpretation of the Act—that is far from true.	8
Even though the parties stipulated to facts during administrative proceedings, each	9
of their recitations of those facts differ on appeal. Some facts are still being argued	10
over, such as whether Plaintiffs’ failure to collect the necessary surcharge was a	11
“ministerial” error, or whether Plaintiffs in fact collected the surcharge but failed to	12
transmit it to Defendant. The parties also engage in lengthy disagreements over	13
OSI’s prior practices under the Act regarding accepting late surcharges. These	14
factual disputes and contentions are integral to this case, and thus a declaratory	15
judgment claim—a tool Plaintiffs concede they used in order to avoid determinations	16
during the administrative process—improperly circumvents the requirements of an	17
administrative appeal.	18
{8} 	Second, even if this case was limited to a purely legal question, “[w]hen an	19
agency addresses a question of law by construing or applying a particular statute,	20

6
courts will grant some deference to legal determinations that fall within agency 1
expertise.” Chavez v. Mountain States Constructors, 1996-NMSC-070, ¶ 21, 122 2
N.M. 579, 929 P.2d 971. Plaintiffs do not dispute that OSI has expertise in 3
determining and collecting the appropriate surcharge due under the Act—it is the 4
only entity that does so. See § 41-5-25. Defendant is accordingly owed some 5
deference, of course while being mindful that courts “are not bound by the agency’s 6
interpretation and . . . may substitute [their] own independent judgment for that of 7
the agency if the agency’s interpretation is unreasonable or unlawful. Albuquerque 8
Bernalillo Cnty. Water Util. Auth. v. N.M. Pub. Regul. Comm’n, 2010-NMSC-013, 9
¶ 51, 148 N.M. 21, 229 P.3d 494 (omission, internal quotation marks, and citation 10
omitted). Plaintiffs make it abundantly clear that the purpose of their declaratory 11
judgment claim was to avoid any deference that may have been owed to OSI’s 12
interpretation of the Act. In doing so, their use of a declaratory judgment action falls 13
squarely within the warning enunciated in Smith. See 2007-NMSC-055, ¶ 15. Thus, 14
we conclude that it was not error for the district court to dismiss Plaintiffs’ 15
declaratory judgment claim and instead hear the case under its appellate jurisdiction. 16
{9} The only justification Plaintiffs offer to convince us that they should have 17
been permitted to pursue their declaratory judgment claim is that procedural due 18
process entitles them to de novo review of the statute, without any deference to the 19
agency. However, procedural due process requires sufficient review by the judiciary 20

7
of “whether the litigant received a fair hearing and whether the law was correctly	1
applied.” Bd. of Educ. of Carlsbad Mun. Schs. v. Harrell, 1994-NMSC-096, ¶ 49,	2
118 N.M. 470, 882 P.2d 511. Plaintiffs have provided us with no reason to believe	3
their declaratory judgment claim entitles them with even greater procedural due	4
process than that typically owed under an administrative appeal. And Plaintiffs have	5
not 	appealed 	from 	the 	district 	court’s 	decision 	to 	affirm 	the 	administrative	6
proceedings such that they could argue that review was insufficient. Therefore, given	7
all the reasons laid out above, we conclude that the district court did not abuse its	8
discretion by dismissing Plaintiffs’ declaratory judgment claim.	9
CONCLUSION	10
{10} 	For the reasons set forth above, we affirm the district court’s order dismissing	11
Plaintiffs’ declaratory judgment claim.	12
{11} 	IT IS SO ORDERED.	13
____________________________________	14
SHAMMARA H. HENDERSON, Judge	15
WE CONCUR:	16
________________________________	17
JACQUELINE R. MEDINA, Judge	18
________________________________	19
JANE B. YOHALEM, Judge	20

OCR transcription for search; preserved printed pages are authoritative

ind

a
12

16
17
18
19

an
22
43

fo!

Corrections to this opition/decision not affecting the outcome, at the Court's discretion, can occur up to the time of publication
with NM Cornpilazen Commussion. The Court will ensure that the electronic version of this opmuon/decision 1s updated accordmeg ly
in Odyssey.

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
O pinion Number: Court of Appeals of New Mexico
_ ; Filed 3/9/2023 11:33 AM
Filing Date: March 9, 2023 :

No. A-1-CA-38334

BEECHER CARLSON INSURANCE
SERVICES, LLC and CALIFORNIA
MEDICAL GROUP INSURANCE
COMPANY RISK RETENTION GROUP,

Plaintiffs- Appellants,
v.

JENNIFER A. CATECHIS, as Superintendent
of Insurance fer the State of New Mexico,

Defendant-Appellee.

APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Francis J. Mathew, District Court Judge

Madison, Mroz, Steinman, Kenny & Olexy, P.A.
Wilham C. Madison

Gregory D. Steinman

Albuquerque, NM

for Appellants
Office of Superintendent of Insurance
R. Alfred Walker, Associate General Counsel

Santa Fe, NM

for Appellee

OPINION

HENDERSON, Judge.

(13, The memorandum opinion filed on March 2, 2023, is hereby withdrawn, and
this opimion is substituted in its place, based on the March 8, 2023, order granting
the motion to publish. Plaintiffs Beecher Carlson Insurance Services, LLC (Beecher)
and California Medical Group Insurance Company Risk Retention Group (CRRG)
(collectively, Plaintiffs) appeal the district court’s dismissal of their declaratory
judgment claim against New Mexico Interim Superintendent of Insurance, Jennifer
A. Catechis (Defendant).! Plaintiffs filed a complaint for declaratory judgment
asking the district court to construe Section 41-5-25 of the Medical Malpractice Act
(the Act), NMSA 1978, §§ 41-5-1 to -29 (1976, as amended through 2021), to
require that the Office of the Superintendent of Insurance (OSI) accept a late-
tendered surcharge and recognize CRRG’s insured, DaVita Medical Group New
Mexico, LLC (DaVita), as a qualified health care provider from June 1, 2017 through

December 23, 2017.

'John Franchini was the named defendant below. However, Mr. Franchini’s
tenure as Superintendent and custodian of the Patient Compensation Fund (PCF)
ended on December 31, 2019, after this appeal was filed. Jennifer A. Catechis is now
the current Interim Superintendent and custodian of the PCF. See NMSA 1978, §
S9A-2-2.1(F) (2013, amended 2020). Pursuant to Rule 12-301(C)(1) NMRA, Ms.
Catechis is automatically substituted as Defendant and the proceedings in this matter
shall be pursued in her name for the duration of her tenure as Interim Superintendent.

3
stemming from the exercise of the district court’s appellate jurisdiction, and a direct 1
appeal to address issues stemming from the exercise of the district court’s original 2
jurisdiction” (internal quotation marks and citation omitted)). Therefore, we limit 3
our review only to the district court’s dismissal of Plaintiffs’ declaratory judgment 4
claim. 5
Declaratory Judgment 6
{4} It was not error for the district court to dismiss Plaintiffs’ declaratory 7
judgment claim.2 Plaintiffs’ complaint sought a declaration that Section 41-5-25 of 8
the Act did not prevent Defendant from accepting the late surcharge and recognizing 9
DaVita as a qualified health care provider from June 2017 to December 2017, and 10
ordering Defendant to do so. Plaintiffs explain that the purpose of their claim was to 11
obtain de novo review of the Act, without any deference to Defendant’s 12
interpretation and implementation of it. This approach circumvented the typical 13
administrative process, a tactic which New Mexico courts have repeatedly looked at 14
with disfavor. 15
{5} “The district court is vested with broad discretion to grant or refuse claims for 16
declaratory relief.” Headen v. D’Antonio, 2011-NMCA-058, ¶ 6, 149 N.M. 667, 253 17
2 Defendant contends that Plaintiffs lack standing to sue for declaratory
judgment. In this case, where the district court dismissed the claim at the pleading
stage, we need not address Defendant’s contention, because even if we were to
assume, without deciding, that Plaintiffs have standing, their claim was still
appropriately dismissed.

5
appeal.” New Energy Econ., Inc., 2010-NMSC-049, ¶ 12. These limitations “on the 1
use of the declaratory judgment action respect the role of each branch of government 2
in the constitutional scheme and the administrative processes put in place by the 3
Legislature.” Id. ¶ 14. 4
{7} Here, Plaintiffs sought to circumvent those limitations by foreclosing 5
necessary fact-finding by OSI and discouraging the district court’s reliance on 6
Defendant’s administrative expertise. First, although Plaintiffs construe the issue in 7
this case as a purely legal one—an interpretation of the Act—that is far from true. 8
Even though the parties stipulated to facts during administrative proceedings, each 9
of their recitations of those facts differ on appeal. Some facts are still being argued 10
over, such as whether Plaintiffs’ failure to collect the necessary surcharge was a 11
“ministerial” error, or whether Plaintiffs in fact collected the surcharge but failed to 12
transmit it to Defendant. The parties also engage in lengthy disagreements over 13
OSI’s prior practices under the Act regarding accepting late surcharges. These 14
factual disputes and contentions are integral to this case, and thus a declaratory 15
judgment claim—a tool Plaintiffs concede they used in order to avoid determinations 16
during the administrative process—improperly circumvents the requirements of an 17
administrative appeal. 18
{8} Second, even if this case was limited to a purely legal question, “[w]hen an 19
agency addresses a question of law by construing or applying a particular statute, 20

7
of “whether the litigant received a fair hearing and whether the law was correctly 1
applied.” Bd. of Educ. of Carlsbad Mun. Schs. v. Harrell, 1994-NMSC-096, ¶ 49, 2
118 N.M. 470, 882 P.2d 511. Plaintiffs have provided us with no reason to believe 3
their declaratory judgment claim entitles them with even greater procedural due 4
process than that typically owed under an administrative appeal. And Plaintiffs have 5
not appealed from the district court’s decision to affirm the administrative 6
proceedings such that they could argue that review was insufficient. Therefore, given 7
all the reasons laid out above, we conclude that the district court did not abuse its 8
discretion by dismissing Plaintiffs’ declaratory judgment claim. 9
CONCLUSION 10
{10} For the reasons set forth above, we affirm the district court’s order dismissing 11
Plaintiffs’ declaratory judgment claim. 12
{11} IT IS SO ORDERED. 13
____________________________________ 14
SHAMMARA H. HENDERSON, Judge 15
WE CONCUR: 16
________________________________ 17
JACQUELINE R. MEDINA, Judge 18
________________________________ 19
JANE B. YOHALEM, Judge 20

March 9, 2023- Beecher Carlson Insurance Services, LLC v. Jennifer A. Catechis, No. A-1-CA-38334

Full text

OCR transcription for search; preserved printed pages are authoritative

Continue your research in ChatGPT or Claude