May 12, 2021- Richard James Gonzagowski v. Steamatic of Albuquerque, Inc., No. A-1-CA-37321

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO	1
Opinion Number: ________________	2
Filing Date: May 12, 2021	3
No. A-1-CA-37321	4
RICHARD JAMES GONZAGOWSKI,	5
Plaintiff-Appellee,	6
v.	7
STEAMATIC OF ALBUQUERQUE, INC.	8
d/b/a STEAMATIC OF ALBUQUERQUE	9
& SANTA FE, INC., and GEB, INC.,	10
Defendants-Appellants,	11
and	12
ALLSTATE INDEMNITY COMPANY	13
and GERARD BECKER,	14
Defendants.	15
APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY	16
Clay Campbell, District Judge	17
Santillanes & Neidhardt, P.C.	18
Janet Santillanes	19
Olivia Neidhardt	20
James T. Roach	21
Albuquerque, NM	22
Court of Appeals of New Mexico
Filed 5/12/2021 12:59 PM

The Roehl Law Firm PC	1
Jerrald J. Roehl	2
Katherine C. Roehl	3
Albuquerque, NM	4
for Appellee	5
Utton & Kery, P.A.	6
Craig T. Erickson	7
Albuquerque, NM	8
Sutin, Thayer & Browne	9
Mariposa Padilla Sivage	10
Jacqueline K. Kafka	11
Albuquerque, NM	12
BatesCarey LLP	13
Agelo L. Reppas	14
Chicago, IL	15
for Appellants	16

OPINION	1
DUFFY, Judge.	2
{1} 	In this appeal, Defendants Steamatic of Albuquerque & Santa Fe, Inc. and	3
GEB, Inc. (collectively, Steamatic) argue that the district court erred in declining to	4
reduce the amended final judgment against Steamatic based on another defendant’s	5
partial satisfaction of the compensatory damages award. We agree and reverse.	6
BACKGROUND	7
{2} 	After 	a 	hailstorm 	caused 	interior 	water 	damage 	to 	Plaintiff 	Richard	8
Gonzagowski’s home, he filed a claim with his homeowner’s insurance carrier,	9
Allstate Indemnity Company, which then contracted with Steamatic to perform	10
water mitigation work. During the dry-out process, Steamatic discovered mold	11
inside the home. Plaintiff claimed that Steamatic performed the water mitigation and	12
mold remediation work improperly and, as a result, he developed a severe and	13
permanent lung condition from inhaling mold and mold spores.	14
{3} 	Plaintiff filed a complaint that included a breach of contract claim against	15
Allstate for failing to adequately remediate Plaintiff’s home and a negligence claim	16
against Steamatic for negligently repairing and remediating Plaintiff’s home. 1 When	17
the parties were settling jury instructions during trial, Plaintiff made clear that he	18
1Plaintiff also sued Steamatic for breach of contract but abandoned that claim
before trial.

2
was seeking the same compensatory damages under both theories of liability. Given	1
this, the district court and the parties grappled with how to instruct the jury to	2
determine 	each 	defendant’s 	respective 	liability 	and 	avoid 	double 	recovery.	3
Plaintiff’s proposed special verdict form included a question asking the jury to state	4
the total amount of Plaintiff’s compensatory damages. The district court noted,	5
[W]hat I like about [] Plaintiff’s version is there’s no possibility of	6
double recovery. There’s no possibility of double recovery. The	7
damages that they are seeking from Steamatic are exactly the same as	8
they are seeking from Allstate. So they’re just going[ to] stick in, in the	9
answer to that question, what the total amount of compensatory	10
damages are.	11
{4} 	The parties disagreed about how to allocate a single compensatory damages	12
figure between the two causes of action. Steamatic and Plaintiff took the position	13
that the total compensatory award could not be divided between the contract and	14
negligence claims without improperly comparing contract liability to tort liability.	15
In their view, if Plaintiff prevailed under both theories, he would have to elect his	16
remedy in contract or in tort. Allstate, on the other hand, advocated for what would	17
eventually become Question No. 12 on the special verdict form, which asked the	18
jury to allocate, by percentage, the compensatory damages caused by each party.	19
{5} 	The special verdict form given to the jury included the following questions:	20
Question No. 3: Did Allstate breach its insurance contract with Richard	21
Gonzagowski?	22
YES 	NO	23

3
Question No. 4: Was Allstate’s breach of contract a cause of Richard	1
Gonzagowski’s injury?	2
YES 	NO	3
. . . .	4
Question No. 5. Did Richard Gonzagowski fail to exercise ordinary	5
care to minimize, or lessen, his damages?	6
YES 	NO	7
. . . .	8
Question 	No. 	6: 	Was 	Steamatic 	negligent 	in 	the 	water 	damage	9
mitigation 	and/or 	mold 	remediation 	work 	it 	did 	in 	Richard	10
Gonzagowski’s home . . . ?	11
YES 	NO	12
Question No. 7: Was Steamatic’s negligence a cause of Richard	13
Gonzagowski’s injury?	14
YES 	NO	15
. . . .	16
Question No. 9: Did Richard Gonzagowski fail to exercise ordinary	17
care to minimize, or lessen, his damages?	18
YES 	NO	19
If your answer to Question No. 9 is “YES”, compare the negligence of	20
Steamatic with the negligence of Richard Gonzagowski in failing to	21
mitigate his damages . . . .	22
Steamatic 	%	23
Richard Gonzagowski 	%	24
Total 	100%	25

4
The jury answered “yes” to these questions and in response to Question 9, found	1
Steamatic eighty percent at fault and Plaintiff twenty percent at fault. The jury was	2
also asked the following two questions:	3
Question No. 11: In accordance with the damage instructions given by	4
the 	Court, 	what 	are 	Richard 	Gonzagowski’s 	total 	compensatory	5
damages?	6
$	7
Question 	No. 	12: 	Identify 	the 	total 	percentage 	of 	compensatory	8
damages caused by each of the following parties. . . .	9
Allstate 	%	10
Steamatic 	%	11
Richard Gonzagowski 	%	12
Total 	100%	13
{6} 	The jury awarded a total of $2.5 million in compensatory damages under	14
Question 11. For Question 12, the jury found that Allstate caused thirty percent of	15
the compensatory damages, 	Steamatic fifty-five percent, 	and Plaintiff fifteen	16
percent. Pursuant to these findings, the district court entered judgment against	17
Allstate for $750,000 and against Steamatic for $1.375 million. Later that month,	18
Plaintiff and Allstate notified the district court that they had settled for an	19
undisclosed amount. Plaintiff subsequently filed a satisfaction and release of the	20
judgment against Allstate.	21
{7} 	Days after announcing his settlement with Allstate, Plaintiff filed a motion to	22
amend the judgment against Steamatic from $1.375 million to $2 million. Plaintiff	23

5
argued that it was an error to compare Allstate’s breach of contract to Steamatic’s	1
negligence for purposes of apportioning liability for damages in Question 12. Based	2
on that premise, Plaintiff argued that the allocation under Question 12 must be	3
disregarded and judgment entered against Steamatic for the full compensatory	4
damage award on the negligence claim. Plaintiff calculated Steamatic’s liability at	5
$2 million, or total damages less twenty percent, based on the jury’s findings in	6
Question 9. And while Plaintiff acknowledged his settlement with Allstate, he	7
argued that the collateral source rule precluded an offset in favor of Steamatic and	8
negated consideration of double recovery. The district court agreed with Plaintiff’s	9
reasoning and granted the motion.	10
{8} 	After the district court entered an amended final judgment against Steamatic	11
in the amount of $2 million, Steamatic filed a motion asking the court to reduce the	12
amended judgment by the amount of the judgment against Allstate, i.e., $750,000.	13
The district court denied the motion and this appeal followed.	14
DISCUSSION	15
{9} 	Steamatic argues that the district court improperly awarded a partial double	16
recovery to Plaintiff and the remedy is to reduce the amended final judgment by	17
$750,000.2 We agree that a reduction is warranted based on the settled principle that	18
2Steamatic has not argued that the district court otherwise erred in its decision
to amend the final judgment to impose full liability on Steamatic, saying in its
briefing that “[a]ll concerned agree that the trial court erred by allowing the jury to

6
a plaintiff is entitled to but one satisfaction for his injuries. The amount of the	1
reduction, 	however, 	ultimately 	depends 	upon 	the 	amount 	or 	proportion 	of	2
compensatory damages Plaintiff actually received from Allstate.	3
{10} 	New Mexico generally adheres to the policy that “[d]uplication of damages or	4
double recovery for injuries received is not permissible.” Hood v. Fulkerson, 1985-	5
NMSC-048, ¶ 12, 102 N.M. 677, 699 P.2d 608. This means that “plaintiffs may not	6
collect more than the damages awarded to them, or, put another way, they may not	7
receive compensation twice for the same injury.” Sunnyland Farms, Inc. v. Cent.	8
N.M. Elec. Coop., Inc., 2013-NMSC-017, ¶ 47, 301 P.3d 387; see also Hood, 1985-	9
NMSC-048, ¶ 12 (“Where there are different theories of recovery and liability is	10
found on each, but the relief requested was the same, namely compensatory	11
damages, the injured party is entitled to only one compensatory damage award.”). In	12
line with this principle, our Supreme Court has said that “[t]o the extent a judgment	13
for damages is paid by one or more of the judgment debtors, . . . a claim for the same	14
damages against any other person is extinguished regardless of the theories upon	15
which the respective claims for relief are based.” Sanchez v. Clayton, 1994-NMSC-	16
allocate common damages between negligence and breach of contract theories of
liability[.]” But see, e.g., Medina v. Dist. of Columbia, 643 F.3d 323, 326 (D.C. Cir.
2011) (stating that “a jury is not prohibited from allocating a single damages award
between two distinct theories of liability”); Indu Craft, Inc. v. Bank of Baroda, 47
F.3d 490, 497 (2d Cir. 1995) (upholding a jury award that apportioned damages
between two causes of action, one for breach of contract and one for tort).

7
064, ¶ 6, 117 N.M. 761, 877 P.2d 567. This is essentially an expression of the rule	1
stated in Restatement (Second) of Judgments § 50 (1982), regarding the effect of a	2
satisfaction of judgment:	3
When a judgment has been rendered against one of several persons each	4
of whom is liable for a loss claimed in the action on which the judgment	5
is based . . . [a]ny consideration received by the judgment creditor in	6
payment of the judgement debtor’s obligation discharges, to the extent	7
of the amount of value received, the liability to the judgment creditor	8
of all other persons liable for the loss.	9
{11} 	New Mexico courts first applied this principle in circumstances where the	10
plaintiffs had received full satisfaction of an earlier judgment before pursuing a	11
second lawsuit against a different defendant for the same injuries. Vaca v. Whitaker,	12
1974-NMCA-011, ¶ 22, 86 N.M. 79, 519 P.2d 315. This Court held that the full	13
satisfaction of the earlier judgment barred the plaintiffs from recovering additional	14
damages. Id.; see also Fortuna Corp. v. Sierra Blanca Sales Co., 1976-NMSC-014,	15
¶ 12, 89 N.M. 187, 548 P.2d 865 (holding that the plaintiff was not entitled to further	16
recovery on a breach of contract claim because the plaintiff had acknowledged the	17
full satisfaction of the judgment).	18
{12} 	The New Mexico Supreme Court later applied the same principle in the	19
context of a partial satisfaction of judgment in Sanchez and concluded that the	20
plaintiffs may pursue the remaining unpaid portion of the compensatory damages	21
award 	from other 	liable 	defendants. 	1994-NMSC-064, 	¶ 20. 	In 	Sanchez, 	the	22
plaintiffs first filed suit in federal court against three defendants for violation of their	23

8
civil rights, and subsequently brought a separate suit in state court against two	1
additional defendants for civil conspiracy, tortious interference with an employment	2
contract, and breach of contract after the plaintiffs were unsuccessful in joining these	3
defendants in the federal action. Id. ¶ 3. The plaintiffs acknowledged that although	4
the theories of recovery were different, they were seeking the same compensatory	5
damages in both cases. Id. ¶ 5.	6
{13} 	In the federal action, the plaintiffs obtained a judgment for $180,000 in	7
compensatory damages, $400,000 in punitive damages, and $170,000 in attorney	8
fees for a total of $750,000. Id. ¶ 4. The parties thereafter settled for $700,000, and	9
the plaintiffs executed a release of judgment, although it was unclear how the	10
settlement was allocated between the different damage categories and thus, whether	11
the entire $180,000 compensatory damages award was fully satisfied. Id. ¶¶ 4, 19.	12
Following the settlement in the federal case, the state district court granted summary	13
judgment in favor of the remaining defendants based on the principle against double	14
recovery set forth in Vaca, reasoning that “[a] plaintiff is entitled to but one	15
compensation 	for 	his 	loss 	and 	satisfaction 	of 	his 	claim 	prevents 	its 	further	16
enforcement. In effect, where payment of the judgment in full is made by the	17
judgment debtor, the plaintiff is barred from further action against another who is	18
liable for the same damages.” Sanchez, 1994-NMSC-064, ¶ 5 (internal quotation	19
marks and citation omitted); see id. ¶ 11 (noting that this principle “applies only to	20

9
an award of compensatory damages (‘the measure of a loss’), and then only to the	1
extent that a judgment is paid”). Although our Supreme Court agreed with these	2
principles, see id. ¶¶ 6, 11, the Court reversed, reasoning that the plaintiffs had not	3
yet 	received 	full 	satisfaction 	of 	the 	compensatory 	damages 	award. 	Id. 	¶ 19	4
(concluding that a portion of the compensatory damages judgment remained unpaid	5
and prorating the shortfall between the judgment and settlement). The Court thus	6
held that the portion of compensatory damages not paid in the settlement may be	7
recovered. Id.	8
{14} 	The case before us is remarkably similar to Sanchez, with the exception that	9
Plaintiff pursued both Defendants in a single action rather than in consecutive	10
lawsuits. That procedural distinction makes no difference in the application of the	11
one satisfaction rule, however, and the substantive considerations that guide our	12
analysis are nearly identical in both cases. See 47 Am. Jur. 2d Judgments § 769	13
(2021) (“A person can sue any number of parties, and obtain a judgment against any	14
one, or several of them, but can gain but one satisfaction, even though that person	15
may pursue numerous possible avenues of relief simultaneously and may obtain	16
several judgments against different persons for the same obligation or liability.”	17
(footnote 	omitted)). 	Plaintiff 	acknowledged 	that 	he 	was 	seeking 	the 	same	18
compensatory damages from both Steamatic and Allstate even though the theories	19
of 	recovery 	were 	different. 	The 	jury 	determined 	the 	measure 	of 	Plaintiff’s	20

10
compensatory damages and thus established the limit of what Plaintiff can collect.	1
See Sanchez, 1994-NMSC-064, ¶ 18; see also Restatement (Second) of Judgments	2
§ 50 cmt. d (“The adjudication of the amount of the loss . . . has the effect of	3
establishing the limit of the injured party’s entitlement to redress, whoever the	4
obligor may be.”). After the initial judgment had been entered, Plaintiff and Allstate	5
settled and filed a satisfaction and release of the judgment against Allstate.	6
Consequently, as in Sanchez, to the extent Allstate satisfied a portion of the	7
compensatory damages judgment, that satisfaction has the effect of a discharge and	8
reduces the amount Plaintiff is entitled to collect from Steamatic. 1994-NMSC-064,	9
¶¶ 6, 19; Restatement (Second) of Judgments § 50 cmt. c (“A payment by one person	10
liable for a loss reduces pro tanto the amount that the injured person is entitled to	11
receive from other persons liable for the loss.”); 47 Am. Jur. 2d Judgments § 787	12
(2021) (“[P]artial satisfaction has the effect of a discharge pro tanto.”).	13
{15} 	Because the terms of the settlement are not in the record before us, the amount	14
of Steamatic’s remaining liability must be determined on remand. It is Plaintiff’s	15
obligation to establish the amount or proportion of consideration he has already	16
received. See Sanchez, 1994-NMSC-064, ¶ 19 (providing that “[t]he plaintiff settling	17
the judgment . . . has an obligation to establish what compensatory damages he is	18
foregoing in the settlement if he later wishes to show a right to recover compensatory	19
damages” from another defendant).	20

11
{16} 	Finally, as our Supreme Court did in Sanchez, we likewise reject Plaintiff’s	1
argument that the collateral source rule operates in this case as an exception to the	2
rule against double recovery. See id. ¶¶ 6-10. Under the collateral source rule,	3
“compensation received from a collateral source does not operate to reduce damages	4
recoverable from a wrongdoer. In other words, if a plaintiff is compensated for his	5
or her injuries by any source unaffiliated with the defendant, the defendant must still	6
pay damages, even if this means that the plaintiff recovers twice.” Sunnyland Farms,	7
2013-NMSC-017, ¶ 48 (alteration, internal quotation marks, and citation omitted).	8
{17} 	In Sanchez, the Court examined its prior holding in McConal Aviation, Inc. v.	9
Commercial Aviation Insurance Co., 1990-NMSC-093, 110 N.M. 697, 799 P.2d	10
133, where the Court had applied the collateral source rule and declined to credit the	11
plaintiff’s pretrial settlement with one defendant toward the final judgment against	12
another. 	Sanchez, 	1994-NMSC-064, 	¶ 9. 	The 	Sanchez 	Court 	concluded 	that	13
McConal was inapplicable to resolve the issue presented—the effect of a post-	14
judgment settlement with one defendant on another defendant’s liability for the same	15
damages—because the three-member panel in McConal had not reached a consensus	16
on whether the plaintiff’s claims against the defendants involved the same damages,	17
and had not ruled on the applicability or effect of the one satisfaction doctrine.	18
Sanchez, 1994-NMSC-064, ¶¶ 7, 10. Sanchez clarified that the collateral source rule	19
set out in McConal was limited “to the prejudgment settlement of a claim involving	20

12
neither a joint tortfeasor nor a joint obligor under a contract.” Sanchez, 1994-NMSC-	1
064, ¶ 10; Summit Props., Inc. v. Pub. Serv. Co. of N.M., 2005-NMCA-090, ¶ 46,	2
138 N.M. 208, 118 P.3d 716 (recognizing that McConal was limited by Sanchez “to	3
situations where there are no facts showing that the parties were jointly liable for the	4
damages caused to the plaintiff”); see also Sunnyland Farms, 2013-NMSC-017, ¶ 48	5
(recognizing the limitation on 	McConal 	as expressed in 	Summit). Under this	6
standard, the post-judgment settlement of Plaintiff’s breach of contract claim against	7
Allstate, 	for 	a 	portion 	of 	the 	same 	compensatory 	damages 	awarded 	against	8
Steamatic, does not qualify as a collateral source.	9
{18} 	In the twenty-seven years since Sanchez was decided, New Mexico courts	10
have not departed from that standard. The parties have not cited, nor have we found,	11
any authority demonstrating that the collateral source rule has been applied to a post-	12
judgment settlement with one of several parties found liable for the same damages.	13
See Curry v. Great Nw. Ins. Co., 2014-NMCA-031, ¶ 28, 320 P.3d 482 (“Where a	14
party cites no authority to support an argument, we may assume no such authority	15
exists.”). We accordingly conclude the collateral source rule has no application in	16
this case.	17
CONCLUSION	18
{19} 	For the foregoing reasons, we reverse the amended final judgment of the	19
district court and remand for further proceedings consistent with this opinion.	20

13
{20} 	IT IS SO ORDERED.	1
__________________________________	2
MEGAN P. DUFFY, Judge	3
WE CONCUR:	4
__________________________________	5
JENNIFER L. ATTREP, Judge	6
__________________________________	7
SHAMMARA H. HENDERSON, Judge	8