Court: New Mexico Court of Appeals; December 17, 1986; New Mexico; State Appellate Court
Defendants appeal a district court judgment favoring Robert Lee Candelaria regarding the compensability of psychological disability due to work-related stress under the New Mexico Workmen's Compensation Act. Key issues include whether such psychological injuries are compensable, the trial court's denial of post-judgment relief, the awarded attorneys' fees, and interest on the judgment. The court affirmed the lower court's decision.
Candelaria, age 43, has a high school education and a military background, previously working as a foreman and plant manager for 13-14 years until losing his job in 1977. After relocating to New Mexico, he accepted various jobs, eventually becoming a janitor at General Electric (G.E.) with hopes of advancement. He transitioned from janitor to forklift operator, then to a position preparing jet engine parts for plating, experiencing no emotional difficulties until transferred to the day shift under supervisor Jewett.
While initially performing similar duties, Candelaria faced increased responsibilities due to a coworker's departure, leading to stress as he managed additional tasks without support. Despite raising concerns to Jewett and escalating the issue to union and management levels, no action was taken to alleviate his workload.
Plaintiff engaged with the plant manager regarding the hiring of a new worker, but after three weeks, no hire was made. On May 13, 1981, the manager requested more time due to being busy. Subsequently, plaintiff experienced extreme stress under supervisor Jewett, leading to a psychological crisis where he contemplated violence but ultimately fled the situation. Following this incident, plaintiff underwent multiple hospitalizations for psychological issues, specifically anxiety and depression, totaling five admissions. Dr. Gerard S. Fredman, a psychiatrist, attributed plaintiff's conditions to work-related stress, particularly the conflict with Jewett, while noting potential predispositions in plaintiff's history. Dr. Fredman ruled out malingering, citing the authenticity of plaintiff's physical symptoms and genuine suicide attempt. Dr. Stephen I. Sacks, another psychiatrist, confirmed that plaintiff's mood disorders stemmed from workplace stress. Conversely, Dr. Paul Rodriguez, a clinical psychologist for the defendants, diagnosed plaintiff with a schizotypical personality but found insufficient evidence to link his work situation at G.E. to the exacerbation of his pre-existing issues.
Dr. Rodriguez testified that if the hypothetical scenario presented—where the plaintiff faced no prior issues, experienced work-related stress, and suffered a nervous breakdown following a confrontation—was true, then the work environment could have exacerbated the plaintiff's condition. The court later determined that the plaintiff was temporarily totally disabled from May 13, 1981, to January 28, 1983, and permanently partially disabled (25%) thereafter, confirming that an accidental injury occurred on May 13, 1981, preceding each hospitalization.
The appeal raised the issue of whether a worker could receive compensation for psychological injuries resulting from emotional stress without a physical injury. Previous cases in the jurisdiction, such as Kern v. Ideal Basic Industries, have denied recovery based on specific facts. However, no case outright states that psychological injuries due to workplace stress are non-compensable. There remains a split among jurisdictions regarding compensability for psychological injuries without physical impact, with some courts recognizing such claims and others denying them. New Mexico law leans toward acknowledging that emotional or mental stimuli can lead to compensable psychological injuries, as established in various cases involving physical injuries that resulted in psychological disabilities.
In a series of legal cases, both the supreme court and lower courts have determined that injuries resulting from emotional stress at work are compensable under workers' compensation law. Notable cases include Salazar v. County of Bernalillo, which recognized a cerebral hemorrhage due to work stress, and Little v. J. Korber, Co., which involved a heart attack triggered by emotional upset at work. Crane v. San Juan County further established that work-related stress can lead to physical conditions, such as high blood pressure causing eye hemorrhage. These precedents affirm that psychological disabilities qualify as "disabilities" under the relevant Act, and both physical traumas leading to psychological issues and emotional stress causing physical injuries are compensable.
The court asserts that psychological disabilities arising from workplace stress are compensable, aligning with Section 52-1-28 of the Act, which does not differentiate between physical and mental injuries. An "accidental injury" is defined broadly, encompassing both sudden and gradual emotional conditions. The statutory language aims to ensure that employers bear the costs of personal injuries incurred by employees during their work. The court emphasizes the importance of recognizing gradual, non-traumatic emotional injuries as part of workers' compensation, reflecting the intention to treat work-related injuries, regardless of their nature, as a cost of production.
The Hawaii Supreme Court's interpretation of similar statutory provisions reinforces this view, asserting that there should be no distinction between organic and psychological injuries. Mental pressures from employment are acknowledged as significant contributors to disabilities, equating them with physical injuries in terms of compensation. The humanitarian objectives of workers' compensation laws necessitate support for employees unable to work due to impairments linked to their employment conditions. The court found substantial evidence indicating that an accidental injury occurred on May 13, 1981, corroborating the plaintiff's claims and refuting the defendants' assertions.
The excerpt addresses the legal standards for determining whether a psychological injury "arises out of" employment under New Mexico law, specifically referencing Section 52-1-28. It clarifies that a compensable injury does not require extraordinary working conditions; rather, it must be causally related to job duties, as established in cases like Lyon v. Catron County Commissioners and Wilson v. Richardson Ford Sales, Inc. The injury must stem from risks associated with the work environment, not merely occur on the job. In this context, the plaintiff's stress due to conflicts with a colleague (Jewett) is assessed for its work-relatedness.
The excerpt also highlights judicial concerns in other jurisdictions regarding gradual psychological injuries, often linked to fears of fraudulent claims and challenges in evaluating non-physical injuries. The Supreme Court of Wisconsin's interpretation emphasizes that non-traumatic mental injuries must arise from extraordinary situations beyond ordinary workplace stress. The example provided involves a guidance counselor facing significant emotional strain due to staff removal requests from students, illustrating the threshold for establishing liability for psychological injuries in the workplace.
The Department of Industry determined that the plaintiff's receipt of a list and subsequent discussions with students resulted in an "acute anxiety reaction," constituting an accident "arising out of" her employment. However, the court interpreted "arising out of" to mean that such receipt was not sufficiently unusual compared to common emotional strains faced by employees, leading to the dismissal of her compensation application. Several states, including Arkansas, Rhode Island, and Wyoming, have adopted the "School District" interpretation, which requires more than ordinary workplace stress for compensation. The Maine Supreme Court, in Townsend, modified this interpretation, allowing compensation for ordinary work-related stress if clear and convincing evidence shows that such stress predominated in causing the injury. The Townsend court emphasized a subjective standard for those predisposed to mental injury, contrasting with the higher stress standard of the School District rule. Other jurisdictions have adopted a more lenient approach, allowing compensation for gradual mental injuries from daily stress without stringent proof requirements. This ongoing debate balances the need for a progressive compensation system against the necessity of preventing fraudulent claims. The legislative body has the authority to amend coverage provisions, as the existing Act does not differentiate between physical and mental injuries nor require extraordinary conditions for mental injury compensation, unlike physical injuries.
The higher standard of proof in Townsend distinguishes between physical and mental injuries in workers' compensation cases. A worker with a pre-existing physical condition is not held to a higher standard of proof compared to other workers. In contrast, a worker predisposed to mental injury must provide clear and convincing evidence linking the employment-related trauma to their disability. This differentiation is not outlined in the applicable Act, which requires deference to the legislature. It is affirmed that a psychological injury linked to job duties meets the standard of "arising out of" employment without making distinctions based on predisposition to mental injury.
The finding of actual stress, as opposed to perceived or imagined stress, is crucial; actual stress must originate from genuine work conditions. Defendants argue that the plaintiff's claimed stress is imaginary, citing his mental health issues that may distort reality. However, substantial evidence supports the trial court's finding of actual stress, including the absence of coping issues outside of work, symptom flare-ups upon returning to work, the foreman's reputation for harshness, and expert testimonies affirming the reality of the plaintiff's experiences.
The trial court's conclusion on actual stress is upheld without addressing whether perceived stress could establish an injury under the employment context. Plaintiffs must demonstrate that any disability directly results from the injury, which requires expert medical testimony. In this case, the testimonies of Drs. Fredman and Sacks provided sufficient evidence of causation for the plaintiff.
Following the trial, the defendants discovered that the plaintiff had been employed during the proceedings, leading them to seek a new trial based on claims of perjury.
Plaintiff's attorney contended that the context of testimony was focused on the plaintiff's difficulties in securing similar employment. The trial court mandated that the plaintiff's doctors be re-deposed to assess whether their opinions would change with knowledge of the plaintiff’s new job. Dr. Fredman indicated that while the plaintiff's symptoms had lessened due to reduced stress and supportive supervision from his stepson, his overall opinion remained unchanged. Dr. Sacks concurred, stating that if the new job required simple tasks and minimal interpersonal contact, his original opinion would not be altered. The trial court subsequently issued supplemental findings, concluding that the new employment did not impact the doctors' opinions, and that the job involved simple tasks with minimal stress and supportive supervision. The court determined that the objective evidence of the plaintiff's psychological condition outweighed any potential bias from the plaintiff's testimony. The court upheld its discretion in denying post-judgment relief.
Regarding attorney fees, defendants claimed the $15,000 award was excessive. The trial court had considered the statutory factors and relevant case law in making its determination, which accounted for the present value of the award, attorney time spent, and contested issues of causation. The awarded fees, approximately 23% of the recovery, were deemed consistent with legal principles.
On the issue of interest, defendants questioned the 15% annual interest awarded on sums due from the judgment date. While the award of prejudgment interest is discretionary, post-judgment interest is mandated under New Mexico law. The court clarified that interest on judgments is calculated from the entry date, and it properly awarded interest only on amounts due. The trial court's rulings were affirmed, including an additional $2,500 attorney fee award for services on appeal. The entire judgment was upheld.
