May 20, 2013 – Larry Laughlin v. Convenient Management Services, Inc. and Argonaut Insurance Company, No. 32,074

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INTHE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number:
Filing Date: May 20, 2013
NO. 32,074

LARRY V. LAUGHLIN,
Worker-A ppellee/Cross-A ppellant,
V.

CONVENIENT MANAGEMENT SERVICES,
INC. and ARGONAUT INSURANCE COMPANY,

Employer/Insurer- A ppellants/Cross-A ppellees.

APPEAL FROM THE WORKERS’ COMPENSATION ADMINISTRATION
Gregory D. Griego, Workers Compensation J udge

Gerald A. Hanrahan
Albuquerque, NM

for Worker: A ppellee/Cross-A ppellant

Maestas & Suggett, P.C.
Paul Maestas

Albuquerque, NM

for EmployerInsurer- A ppellants/Cross-A ppellees

OPINION
WECHSLER, Judge.
{1} 	Employer 	Convenience 	Management 	Services, 	Inc. 	appeals 	from 	a
compensation order entered pursuant to the Workers’ Compensation Act (the Act),
NMSA 1978, Sections 52-1-1 to -70 (1929, as amended through 2007). Worker filed
a cross-appeal, which we address in a separate memorandum opinion. 	In the
compensation order, the Workers Compensation Judge (the WCJ) determined that
Worker Larry Laughlin was not at maximum medical improvement despite previously
finding that Worker had reached maximum medical improvement five months earlier
in an order granting Worker a partial lump sum payment from future permanent partial
disability for payment of debts, pursuant to NMSA 1978, Section 52-5-12(C) (2009).
We hold that the WCJ did not err by determining that Worker had a “change of
condition” under NMSA 1978, Section52-5-9(B)(1) (1989) by electing to undergo
surgery on his work-related injury and determining that Worker was no longer at
maximum medical improvement. We further hold that neither judicial estoppel nor
the law-of-the-case doctrine bars Worker’s change of position regarding whether he
was at maximum medical improvement at the date of his formal hearing despite the
WCJ’s finding that he was at maximum medical improvement at the time of the lump
sum order. Accordingly, we affirm.

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BACKGROUND
{2} 	Worker suffered accidents on August 22, 2008 and September 14 or 30, 2008
while working for Employer. Worker suffered injuries to both his lower back and left
testicle. He filed a complaint with the Workers’ Compensation Administration (the
WCA) on March 3, 2009, requesting temporary total disability benefits until he
reached maximum medical improvement and permanent partial disability benefits
upon reaching maximum medical improvement.
{3} 	The parties entered a recommended resolution on May 7, 2009 that provided
a $5000 payment to Worker and named Dr. Benito Gallardo as Worker’s authorized
treating physician. Dr. Gallardo examined Worker on May 6, 2009 and found a causal
connection between Worker’s injuries and the accidents on August 22, 2008 and
September 14 or 30, 2008. When Employer refused to provide any temporary total
disability after Dr. Gallardo’s report, Worker filed a second worker’s compensation
complaint. Employer rejected a second recommended resolution on September 29,
2009, and the claim entered the adjudication process. 	Employer did issue worker
temporary total disability benefits of $213.91 a week from July 8, 2009 through
August 18, 2009 and October 21, 2009 through May 3, 2011.
{4} 	Dr. Gallardo testified by deposition on September 24, 2010 that Worker’s back
injury reached maximum medical improvement by March 4, 2010. Likewise, at his

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second deposition, Dr. Gallardo testified that Worker’s left testicle injury had reached
maximum medical improvement by January 25, 2011, at the time that Worker elected
not to have surgery on his left testicle. 	Dr. Gallardo also stated in his second
deposition that Worker was not interested in having surgery on his left testicle but that
if Worker did have a surgical procedure, his left testicle injury would no longer be at
maximum medical improvement. 	After Dr. Gallardo reported maximum medical
improvement on January 25, 2011, Employer issued partial permanent disability
benefits to Worker at 44% impairment commencing on May 4, 2011.
{5} 	On June 30, 2011, Worker filed a petition for partial lump sum payment for
debts, pursuant to Section 52-5-12(C). 	The WCJ granted the lump sum request by
order on July 20, 2011. The order granting partial lump sum payment for debts (the
lump sum order) determined that Worker’s injuries had reached maximum medical
improvement. The WCJ found that Worker had debts of $4,200.73 and approved an
advance payment of that amount to be deducted from future partial permanent
disability benefits. The WCJ also approved an advance payment for an amount equal
to Worker’s first and last month’s rent, plus a damage deposit in the event that Worker
entered into a written rental agreement. Worker subsequently entered into a new lease
agreement, and Employer advanced an additional $1250 to Worker.

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{6} 	The WCJ held the formal hearing on Worker’s claims on December 22, 2012
and issued a memorandum decision and order on February 8, 2012 regarding the
effect of the prior lump sum award. The WCJ determined that the Act allows for a
worker to reach a status of maximum medical improvement and subsequently be
removed from that status under Sections 52-5-9(B)(1) and 52-1-56 upon, among other
reasons, a change in condition. The WCJ concluded that the Act contemplates that
judicial estoppel would not be applicable to a previous determination that a worker is
not at maximum medical improvement. Additionally, the WCJ determined that the
law-of-the-case doctrine does not preclude a worker from arguing about a change of
maximum medical improvement status as long as the change is asserted more than six
months after the entry of the order.
{7} 	At the formal hearing, Worker testified that he tried to delay surgery as long as
possible on his injured testicle. However, he testified that he now wanted the surgical
procedure. Both parties requested findings and conclusions after the December 22,
2011 formal hearing, and the WCJ issued a compensation order on March 14, 2012.
Regarding the legal effect of the lump sum order of July 20, 2011, the WCJ concluded
that the lump sum order did not bar Worker from arguing that he was no longer on
maximum medical improvement at the formal hearing. Accordingly, the WCA found
that Worker first reached maximum medical improvement as of September 10, 2010

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but that “Worker ceased to be on maximum medical improvement status as of
December 22, 2011 when Worker indicated his willingness to be treated surgically for
the [testicle injury].”
{8} 	On appeal, Employer raises three arguments regarding the WCJ’s finding that
Worker was no longer at maximum medical improvement because of his willingness
to have surgery to treat his injured left testicle. Employer argues that the WCJ erred
by determining that (1) Worker’s willingness to have surgery constituted a change of
condition under Sections 52-1-9(B)(1) and 52-1-56 even though his physical or
medical condition had not changed since the WCJ determined he was at maximum
medical improvement in the lump sum order; (2) judicial estoppel did not preclude
Worker from arguing that his left testicle injury had not reached maximum medical
improvement at the formal hearing; and (3) the law-of-the-case doctrine did not
preclude Worker’s change of position that he was no longer at maximum medical
improvement.
STANDARD OF REVIEW
{9} 	“All workers’ compensation cases are reviewed under a whole record standard
of review.” Moya v. City of Albuquerque, 2008-NMSC-004, ¶ 6, 143 N.M. 258, 175
P.3d 926. When our review consists of reviewing a “WCJ’s interpretation of statutory
requirements, we apply a de novo standard of review.” DeWitt v. Rent-A-Ctr., Inc.,

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2009-NMSC-032, ¶ 14, 146 N.M. 453, 212 P.3d 341. 	We review the WCJ’s
application of the law to the facts de novo. Tom Growney Equip. Co. v. Jouett, 2005-
NMSC-015, ¶ 13, 137 N.M. 497, 113 P.3d 320. However, “[w]here the testimony is
conflicting, the issue on appeal is not whether there is evidence to support a contrary
result, but rather whether the evidence supports the findings of the trier of fact.” Id.
(internal quotation marks and citation omitted); Bagwell v. Shady Grove Truck Stop,
104 N.M. 14, 17, 715 P.2d 462, 465 (Ct. App. 1986).
CHANGE OF CONDITION
{10} 	Employer first argues that Worker’s testimony that he now wants surgery to
treat his left testicle injury does not constitute a change of condition, and, therefore,
the WCJ erred by ruling that Worker was no longer at maximum medical
improvement as of December 22, 2011. 	In Employer’s view, the term “change of
condition” refers to a change in a worker’s medical or physical condition, and Worker
presented no testimony that his physical condition had changed, only that he now
wishes to have surgery to address the condition. Worker’s response is twofold: first,
he argues that the lump sum order is not a compensation order for purposes of
Sections 52-5-9(B)(1) and 52-1-56 and, second, that his decision to have surgery on
his left testicle is a change of condition.

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{11} 	Employer premises his argument that the WCJ was required to find that
Worker’s physical or medical condition changed in order to determine that Worker
was no longer at maximum medical improvement on Sections 52-1-56 and 52-5-
9(B)(1). Section 52-1-56 provides:
The [WCJ] may, upon the application of the employer, worker or other
person bound by the compensation order, fix a time and place for hearing
upon the issue of claimant’s recovery. If it appears upon such hearing
that diminution or termination of disability has taken place, the [WCJ]
shall order diminution or termination of payments of compensation as
the facts may warrant. If it appears upon such hearing that the disability
of the worker has become more aggravated or has increased without the
fault of the worker, the [WCJ] shall order an increase in the amount of
compensation allowable as the facts may warrant. Hearings shall not be
held more frequently than at six-month intervals.
In relevant part, Section 52-5-9 provides:
A. 	Compensation 	orders 	are 	reviewable 	subject 	to 	the
conditions stated in this section upon application of any party in interest
in accordance with the procedures relating to hearings. The [WCJ], after
a hearing, may issue a compensation order to terminate, continue,
reinstate, increase, decrease or otherwise properly affect compensation
benefits provided by the . . . Act . . . .
B. 	A review may be obtained upon application of a party in
interest filed with the director at any time within two years after the date
of the last payment or the denial of benefits upon the following grounds:
(1) 	change in condition[.]
{12} 	Under these provisions, the Act allows for modification of compensation orders
upon the aggravation of the worker’s disability or upon a change of condition.

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Employer contends that the term “change in condition” as used in Section 52-5-
9(B)(1) refers only to a “change in a worker’s medical or physical condition” and is
not broad enough to encompass a situation in which the worker elects to undergo a
different treatment option without a change in his medical condition. 	See Fasso v.
Sierra Healthcare Ctr., 119 N.M. 132, 134, 888 P.2d 1014, 1016 (Ct. App. 1994),
overruled on other grounds by Hidalgo v. Ribble Contracting, 2008-NMSC-028, 144
N.M. 117, 184 P.3d 429. Employer additionally states that the case law construing
Section 52-1-56 mandates that the worker’s disability must increase in order to
constitute a change of condition.
{13} 	We conclude that, although a change of condition must relate to a worker’s
physical or medical condition, a change in condition is broad enough to encompass
a situation such as in this case in which the worker’s physical or medical condition
will change due to a worker’s election to undergo different treatment. Viewed in the
context of the Act’s definition of maximum medical improvement, Worker, by
electing to have the surgery, had a change in his physical condition sufficient to
support the WCJ’s conclusion that he was not at maximum medical improvement.
See DeWitt, 2009-NMSC-032, ¶ 14 (“[W]e construe the provisions of the Act together
to produce a harmonious whole.”). The Act defines the date of maximum medical
improvement as “the date after which further recovery from or lasting improvement

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to an injury can no longer be reasonably anticipated based upon reasonable medical
probability as determined by a health care provider.” Section 52-1-24.1. The WCJ’s
conclusion that Worker was no longer at maximum medical improvement was based
on evidence that his left testicle injury would improve with surgical treatment. This
conclusion directly implicates and relates to Worker’s physical condition. As such,
the WCJ did not err by determining that Worker had a change of condition for
purposes of Section 52-5-9(B)(1) by electing to undergo surgery on his left testicle
and determining that Worker was no longer at maximum medical improvement.
{14} 	The cases relied upon by Employer for the proposition that a change in
condition must be based on an aggravation or change to Worker’s physical or medical
condition apart from treatment are inapposite. In Herrera v. Quality Imports, 1999-
NMCA-140, ¶ 12, 128 N.M. 300, 992 P.2d 313, this Court held that a change in the
worker’s educational status did not relate to the “disability” or physical condition of
the worker and therefore modification under Section 52-1-56 was improper based
solely on a change in education status. 	However, Herrera expressly declined to
determine whether modification would be warranted under the “change of condition”
provision of Section 52-5-9(B)(1). Herrera, 1999-NMCA-140, ¶ 3. Additionally, in
this case, Worker’s election to have surgery was tied to his physical condition and the
expected improvement of the condition by undergoing the surgery. The other cases

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cited by Employer address substantial evidence issues regarding whether the worker
adequately showed an increase in the disability percentage and therefore justified a
modification of the award and do not stand for any broad propositions limiting what
constitutes a change in condition. See, e.g., Jaramillo v. Consolidated Freightways,
109 N.M. 712, 715, 790 P.2d 509, 512 (Ct. App. 1990) (holding that substantial
evidence supported the WCJ’s conclusion that there was no change in the worker’s
physical condition); Holliday v. Talk of the Town Inc., 98 N.M. 354, 356, 648 P.2d
812, 814 (Ct. App. 1982) (holding that the worker failed to show that his injuries were
aggravated and thus justified an increased award).
JUDICIAL ESTOPPEL
{15} 	Employer next argues that the WCJ erred by determining that the doctrine of
judicial estoppel did not preclude Worker from arguing that his work-related injuries
had not reached maximum medical improvement at the formal hearing. Employer
argues that because Worker took the position that his injury had reached maximum
medical improvement when he sought and received the partial lump sum payment for
future PPD benefits on July 20, 2011, the district court should have determined that
judicial estoppel precluded Worker from claiming that his injuries had not reached
maximum medical improvement at the December 22, 2011 formal hearing. 	We
review the proper application of judicial estoppel under an abuse of discretion

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standard. Keith v. ManorCare, Inc., 2009-NMCA-119, ¶ 17, 147 N.M. 209, 218 P.3d
1257.
{16} 	The doctrine of judicial estoppel “prevents a party who has successfully
assumed a certain position in judicial proceedings from then assuming an inconsistent
position, especially if doing so prejudices a party who had acquiesced in the former
position.” 	Rodriguez v. La Mesilla Constr. Co., 1997-NMCA-062, ¶ 20, 123 N.M.
489, 943 P.2d 136. 	The purpose of judicial estoppel is to prevent a party “from
playing fast and loose with the court during the course of litigation.” Citizens Bank v.
C & H Constr. & Paving Co., 89 N.M. 360, 366, 552 P.2d 796, 802 (Ct. App. 1976)
(internal quotation marks and citation omitted). Our Supreme Court has stated that
[t]hree elements must be addressed for a party to prevail under the
doctrine of judicial estoppel. First, the party against whom the doctrine
is to be used must have successfully assumed a position during the
course of litigation. Second, that first position must be necessarily
inconsistent with the position the party takes later in the proceedings.
Finally, while not an absolute requirement, judicial estoppel will be
especially applicable when the party’s change of position prejudices a
party who had acquiesced in the former position.
Santa Fe Pac. Trust, Inc. v. City of Albuquerque, 2012-NMSC-028, ¶ 32, 285 P.3d
595 (internal quotation marks and citation omitted).
{17} 	It appears that the first two elements exist in this case. Worker took the position
that his injuries were at maximum medical improvement as of the July 20, 2011 order
granting partial lump sum payment for debts and took the inconsistent position that

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he was no longer at maximum medical improvement at the formal hearing on
December 22, 2011. However, under the facts and circumstances of this case, judicial
estoppel does not apply. First, Employer fails to show how it was prejudiced by the
change of position in this case. At the time of the interim order, Employer was aware
that the matter was still in active litigation and that a final compensation order based
on the formal hearing had not been entered. 	The interim order did not prevent
Employer from contesting the maximum medical improvement date at the formal
hearing. Most importantly, although the interim order required Employer to advance
$4,200.73 to Worker, the funds were from Worker’s future permanent partial
disability benefits, and Employer received a dollar-for-dollar credit for the advance
payment in the final compensation order. Our cases have generally required the party
asserting judicial estoppel to make a showing of prejudice caused by the opposing
party’s change of position. See, e.g., Guzman v. Laguna Dev. Corp., 2009-NMCA-
116, ¶ 15, 147 N.M. 244, 219 P.3d 12 (applying judicial estoppel to bar the defendant
from arguing that workers’ compensation was the plaintiffs’ exclusive remedy due to
the prejudicial effect of depriving plaintiffs of a forum because the defendant
previously successfully argued in the workers’ compensation administration that the
claim was outside the scope of the Act).

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{18} 	Second, as we have discussed, the purpose of judicial estoppel is to prevent “a
party from playing fast and loose with the court during litigation.” 	Santa Fe Pac.
Trust, Inc., 2012-NMSC-028, ¶ 33 (internal quotation marks and citation omitted).
Nothing in the circumstances of this case indicates that Worker was trying to “play
fast and loose” with the WCJ by changing his position about whether his injuries had
reached maximum medical improvement. 	At the time that Worker requested the
partial lump sum payment for future PPD benefits, his position was that he was at
maximum medical improvement because he had elected to not have surgery on his left
testicle injury. 	At the formal hearing, Worker’s position was that he was not at
maximum medical improvement because he had elected to have the surgery. Nothing
in the record indicates that Worker’s change of position was designed to mislead the
WCJ or otherwise take advantage of the system. Cf. id. ¶ 33 (stating that “nothing in
the record indicates that the [party opposing judicial estoppel] intentionally attempted
to mislead the Court” by changing its position).
LAW OF THE CASE
{19} 	Employer lastly argues that the law-of-the-case doctrine barred Worker from
changing his position on whether he had reached maximum medical improvement at
the formal hearing because the law of the case is that Worker reached maximum
medical improvement by July 20, 2011. We review this issue de novo. See State ex

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rel. King v. UU Bar Ranch Ltd. P’ship., 2009-NMSC-010, ¶ 20, 145 N.M. 769, 205
P.3d 816 (stating that review of “[w]hether law of the case applies, as well as how it
applies, are questions of law subject to de novo review”).
{20} 	The doctrine of “law of the case . . . relates to litigation of the same issue
recurring within the same suit.” 	Cordova v. Larsen, 2004-NMCA-087, ¶ 10, 136
N.M. 87, 94 P.3d 830. “Under the law of the case doctrine, a decision on an issue of
law made at one stage of a case becomes a binding precedent in successive stages of
the same litigation.” Id. (internal quotation marks and citation omitted). It is based
on “a matter of precedent and policy; it is a determination that, in the interests of the
parties and judicial economy, once a particular issue in a case is settled it should
remain settled.” Trujillo v. City of Albuquerque, 1998-NMSC-031, ¶ 40, 125 N.M.
721, 965 P.2d 305. The law of the case doctrine is “discretionary and flexible and is
not a doctrine of inflexible law[.]” King, 2009-NMSC-010, ¶ 21 (internal quotation
marks and citations omitted).
{21} 	In its memorandum opinion accompanying the partial lump sum order for
payment of debts, the WCJ stated that the order “awarding partial lump sum does
constitute the law of the case but that it does not preclude Worker from arguing about
a change on maximum medical improvement status as long as that change is asserted
more than six months after entry of the order.” However, less than six months later,

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at the formal hearing, Worker argued that he was not at maximum medical
improvement, and the WCJ agreed that Worker ceased to be at maximum medical
improvement on December 22, 2011. 	Employer’s argument is two-fold: first,
Employer contends that the WCJ violated the WCJ’s own determination on the law
of the case because he miscalculated that six months had not passed between entry of
the July 20, 2011 order and the December 22, 2011 formal hearing. 	Second,
Employer contends that on a more general level, once the WCJ determined that
Worker was at maximum medical improvement for purposes of granting the partial
lump sum request, the determination becomes law of the case and is conclusively
binding on the parties.
{22} 	We first address Employer’s contention that the WCJ erred by not following his
own ruling that Worker’s maximum medical improvement determination was law of
the case for the six months subsequent to the order. The WCJ determined that the Act
requires that the maximum medical improvement determination remain the law of the
case for six months because Section 52-1-56 mandates that hearings regarding the
diminution, termination, or increase of benefits “shall not be held more frequently
than at six-month intervals.” However, the change in maximum medical improvement
status resulted not from a hearing conducted pursuant to an application for
modification based on Section 52-1-56, but instead from the evidence presented at the

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formal hearing on Worker’s claims. We therefore decline to apply the law of the case
doctrine 	to 	the 	determination 	that 	Worker’s 	maximum medical 	improvement
determination was law of the case for six months. See Trujillo, 1998-NMSC-031, ¶
41 (“The application of the law-of-the-case doctrine . . . is discretionary and flexible;
it will not be used to uphold a clearly incorrect decision[.]”).
{23} 	Addressing Employer’s more general contention that once the WCJ determined
that Worker was at maximum medical improvement and issued the lump sum order,
the maximum medical improvement determination became law of the case, we
observe that “[a]lthough it would be grossly inefficient for district courts to review
repeatedly their interlocutory rulings, the law-of-the-case doctrine does not prohibit
the practice.” See State ex rel. Udall v. Pub. Employees Ret. Bd., 118 N.M. 507, 510,
882 P.2d 548, 551 (Ct. App. 1994), rev’d on other grounds by 120 N.M. 786, 907
P.2d 190 (1995). 	For example, in Bell v. N.M. Interstate Stream Comm’n, 1996-
NMCA-010, ¶¶ 12-17, 121 N.M. 328, 911 P.2d 222, this Court held that the law-of-
the-case doctrine did not prevent a district court from overturning its previous
interlocutory order denying summary judgment after remand on appeal. Applying this
principle, the WCJ did not err by determining that the law-of-the-case doctrine did not
apply. Based on the facts presented at the hearing, the WCJ determined that Worker
was no longer at maximum medical improvement because Worker elected to have

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surgery on his injury. 	The law-of-the-case doctrine does not require the WCJ to
ignore the facts before it at the time of the formal hearing based on a previous
determination of maximum medical improvement contained in an interim order when
the claims raised in Worker’s complaint were still pending.
CONCLUSION
{24} 	We hold that the WCJ did not err by determining that Worker had a change of
condition for purposes of Section 52-5-9(B)(1) by electing to undergo surgery on his
left testicle and determining that Worker was no longer at maximum medical
improvement. We further hold that neither judicial estoppel nor the law-of-the-case
doctrine bars Worker’s change of position regarding whether he was no longer at
maximum medical improvement at the time of his formal hearing despite the WCJ’s
finding that he was at maximum medical improvement at the time of the lump sum
order. Accordingly, we affirm.
{25} 	IT IS SO ORDERED.
JAMES J. WECHSLER, Judge
WE CONCUR:

RODERICK T. KENNEDY, Chief Judge

MICHAEL D. BUSTAMANTE, Judge

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