October 24, 2011 – Guillermo Rivera v. Flint Energy and Liberty Mutual Insurance Co., No. 30,020

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number:
Filing Date: 	October 24, 2011
NO. 30,020
GUILLERMO RIVERA,
Worker-Appellant,
v.
FLINT ENERGY AND LIBERTY MUTUAL
INSURANCE COMPANY,
Employer/Insurer-Appellee.
APPEAL FROM THE WORKERS’ COMPENSATION ADMINISTRATION
Helen L. Stirling, Workers’ Compensation Judge
Richard J. Parmley, Jr.
Farmington, NM
for Appellant
Allen, Shepherd, Lewis, Syra & Chapman, P.A.
Kimberly A. Syra
Darin A. Childers
Albuquerque, NM
for Appellee

OPINION
BUSTAMANTE, Judge.
{1} 	Appellant Guillermo Rivera (Worker) appeals the decision of the Workers’
Compensation Judge (WCJ) to apportion Worker’s attorney fees equally between
Worker and Appellee Flint Energy (collectively with its insurer, Appellee Liberty
Mutual 	Insurance 	Company, 	Employer). 	Worker 	argues 	that 	the 	Workers’
Compensation Act obligated Employer to pay Worker’s attorney fees when he
recovered more at trial than he had previously offered to take in settlement. Because
we hold that Worker’s settlement offer failed to comply with the statute on which
Worker relies, we affirm.
BACKGROUND
{2} 	Worker was injured in the course and scope of his employment in 2004. Over
the next five years, Worker litigated various issues related to his injury before the
Workers’ Compensation Administration. 	Following the Workers’ Compensation
Administration Director’s issuance of a recommended resolution, Worker’s attorney
faxed a letter to Employer’s attorneys in June 2009. The letter stated that “[w]e would
agree to settle as follows[,]” and listed eight factors comprising a proposed settlement.
The letter concluded, “[p]lease review the information and offer I have given you and
contact me.” Employer did not accept Worker’s offer.

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{3} 	Trial of Worker’s claims took place in July 2009. The resulting compensation
order awarded Worker benefits in excess of those his counsel had proposed in his
letter to Employer. 	Worker then filed an application for attorney fees, seeking
payment of all fees by Employer under NMSA 1978, Section 52-1-54(F) (2003). That
section allows a claimant who makes a pretrial settlement offer to recover attorney’s
fees, if the offer is (1) made pursuant to the statute, (2) for an amount less than is
awarded at trial, and (3) rejected by the employer. The WCJ denied Worker’s request
for apportionment, finding that the letter did not “provide sufficient specificity or
adhere sufficiently to the statute” to trigger the statute’s fee-shifting provisions.
Accordingly, the judge apportioned Worker’s attorney fees, in the amount of $16,500,
equally between Worker and Employer. Worker now appeals the apportionment of
his attorney fees.
DISCUSSION
Standard of Review
{4} 	We review a WCJ’s interpretation of a statute de novo. 	Dewitt v. Rent-A-
Center, Inc., 2009-NMSC-032, ¶ 14, 146 N.M. 453, 212 P.3d 341. We begin with the
plain meaning of the statute’s words and construe its provisions together to produce
a harmonious whole. Id. Once we determine the meaning of the statute, we review

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the record to determine whether the findings and award are supported by substantial
evidence. Id.
Worker’s Letter Failed to Comply With Section 52-1-54(F)
{5} 	Section 52-1-54(F) provides that a litigant before the Workers’ Compensation
Administration “may serve upon the opposing party an offer to allow a compensation
order to be taken against him.” The statute further provides that, “if the worker’s offer
was less than the amount awarded by the compensation order, the employer shall pay
one hundred percent of the attorney fees to be paid the worker’s attorney.”
Section 52-1-54(F)(4). Worker’s attorney sent the letter at issue about a month before
trial. 	The letter proposed that Employer accept the following eight values in
resolution of the case:
[Maximum medical improvement] date: 	August 18, 2006
Impairment rating: 	20%
Modifier points: 	72
Total [permanent partial disability] % rate: 	92%
PPD weekly $ rate: 	$386.46
Overpayment through 6/24/09: 	$8,433.93
Overpayment at $386.46/week: 	21.82 weeks
Weeks remaining from 6/24/09: 	423.18 weeks
The letter was silent in regard to Section 52-1-54(F). It did not refer to the section,
nor to any language in the section. It did not indicate that the offer was to allow a
compensation order to be taken against Employer or to invoke the fee shifting
provision in the Act. Employer rejected Worker’s offer, and the case proceeded to

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trial. 	At trial, the WCJ awarded Worker the following values for the first five of
Worker’s factors listed above:
[Maximum medical improvement] date: 	December 12, 2006
Impairment rating: 	20%
Modifier points: 	79
Total [permanent partial disability] rating: 	99%
PPD weekly $ rate: 	$415.87
Thus, it is undisputed that Worker was awarded more at trial than his counsel had
offered in his June 2009 letter. Worker argued below, and argues on appeal, that the
letter was subject to Section 52-1-54(F). Accordingly, Worker argues the WCJ erred
by failing to require Employer to pay the entirety of Worker’s attorney fees.
{6} 	The issue on appeal is whether Worker’s letter constitutes a valid “offer to
allow a compensation order to be taken against” Employer. Id. Employer argues that
the WCJ was correct in finding that the letter did not adequately put Employer on
notice that the letter was intended to trigger the fee-shifting provisions of Section 52-
1-54(F). We agree.
{7} 	Neither party cites authority construing the requirements of a Section 52-1-
54(F) offer or otherwise involving the adequacy of a settlement offer to trigger the
statute’s fee-shifting provision. 	Although we have construed the requirements of
Section 52-1-54(F) before, the issue raised is one of first impression. Both parties cite
Naranjo v. Paull, 111 N.M. 165, 803 P.2d 254 (Ct. App. 1990). The Naranjos sued

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the Paulls for losses they incurred in investments the Paulls had solicited from them.
Id. at 166-67, 803 P.2d at 255-56. The Paulls argued that liability was barred by the
Paulls’ prior offer to repurchase the securities under NMSA 1978, Section 58-13-
42(B) (repealed 1986), a section of the New Mexico Securities Act. 	Naranjo, 111
N.M. at 168, 803 P.2d at 257. This Court held that an offer sent by the Paulls to all
their investors did not qualify as an “offer to repurchase securities” under the
Securities Act and therefore could not protect the Paulls from suit. Id. As such, while
it is useful by way of analogy, Naranjo provides only limited direct guidance in
connection with the workers’ compensation statute at issue here.
{8} 	Naranjo is instructive on another level. In Naranjo, we based our decision on
fundamental contract principles, which translate directly to our analysis under Section
52-1-54(F). See Naranjo, 111 N.M. at 169, 803 P.2d at 258. At its most basic level,
this case concerns specifically what type of contract Worker sought. 	As we
recognized in Naranjo, “[i]n order to be legally operative and to create a power of
acceptance, it is necessary that the offer shall contain all the terms of the contract to
be made.” Id. (internal quotation marks and citation omitted).
{9} 	Here, Employer argues that the offer from Worker’s counsel failed to apprise
Employer that the offer was intended to be governed by Section 52-1-54(F), whether
on its face or through the filing of a certificate of service with the Workers’

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Compensation Administration. Employer notes that the offer did not mention the
statute or state that the offer it contained was valid only for the ten-day period the
statute requires. The offer did not refer to the statute’s fee-shifting provision. Also,
while we note that the offer was clearly offering to settle the case, Employer observes
that it did not state that accepting the offer would require Employer to have a
compensation order entered against it. Employer could reasonably have concluded
that accepting Worker’s offer to “settle” the case would result in the simple dismissal
of the action before the Workers’ Compensation Administration, rather than the
formal entry of an order that the statute requires. We conclude that the offer did not
set forth any language that can support the type of agreement Worker claims he
intended. 	Such an omission makes the offer ambiguous as to whether Worker
proposed an offer of settlement or an offer of judgment. 	“This flaw in the offer
represents a fatal error in the offer and therefore the offer must be deemed to be
incomplete . . . [and] a nullity.” Leonard v. Payday Professional, 2007-NMCA-128,
¶ 23, 142 N.M. 605, 168 P.3d 177.
{10} 	Because the offer failed to either reference Section 52-1-54(F) or to otherwise
mention language in that section that would put Employer on notice that the offer was
one to allow a compensation order to be taken against Employer, we hold that it was
not a valid and effective offer that could invoke the fee shifting provision in the Act.

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Because the offer did not set forth any language indicating that it was an offer under
Section 52-1-54(F), we hold that it was not a valid offer of such an agreement. See
Naranjo, 111 N.M. at 169, 803 P.2d at 258. Accordingly, we hold that the WCJ did
not err by apportioning Worker’s attorney fees evenly between Worker and Employer.
{11} 	We have previously analogized Section 52-1-54(F) to the Federal Rule of Civil
Procedure 68, which itself is similar to our own Rule of Civil Procedure, Rule 1-068
NMRA. 	Baber v. Desert Sun Motors, 2007-NMCA-098, ¶ 18, 142 N.M. 319, 164
P.3d 1018, (“In Lang v. Gates, 36 F.3d 73 (9th Cir. 1994), cited by Hise [v. City of
Albuquerque, 2003-NMCA-015, 133 N.M. 133, 61 P.3d 842], the Ninth Circuit Court
of Appeals noted that an offer of judgment under the Federal Rule of Civil Procedure
68, which is worded substantially similar to Section 52-1-54(F), has the principle
purpose ‘to encourage settlement and to avoid litigation.’”). Despite their similarities,
this case demonstrates the difference between the rules.
{12} 	Prior to 2003, Rule 1-068 mirrored Section 52-1-54(F), in that both required
offers of judgment. The Rules Committee, however, amended Rule 68, expressing its
belief that requiring “a judgment be entered for the amount of the agreed-upon offer
was a disincentive to some litigants to make offers” because those litigants preferred
to settle the dispute informally without an entry of judgment. Rule 68, Committee
Commentary. 	The rule now titles the procedure an “Offer of settlement” to make

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explicit that both offers of judgment and offers of settlement are acceptable means of
triggering the rule, even where the only judgment entered is one of dismissal. Section
52-1-54(F) has undergone no such change. 	The title remains in part, “offer of
judgment” and its language requiring “a compensation order to be taken” remains
good law. Thus, while the purpose of both the statute and rule remain similar—to
promote and encourage settlement, the technical requirements of triggering the offer
do not.
{13} 	As guidance and clarification for the bench and bar, we are not suggesting that
offers sufficient to allow fee-shifting need to follow any specific format to be
effective. But at a minimum, if counsel’s aim is to invoke the provisions of Section
52-1-54(F), the document conveying the offer must refer to the statute explicitly or
address each of its material requirements, including that if the offer is accepted a
judgment is to be entered against Employer.
CONCLUSION
{14} 	For the reasons stated herein, we affirm the WCJ’s order awarding attorney
fees.

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{15} 	IT IS SO ORDERED.
MICHAEL D. BUSTAMANTE, Judge
WE CONCUR:
JONATHAN B. SUTIN, Judge
J. MILES HANISEE, Judge