Court: New Mexico Supreme Court; November 21, 1988; New Mexico; State Supreme Court
The Regents of the University of New Mexico appeal a dismissal in favor of Liberty Mutual Insurance Company regarding a hospital lien claim. The trial court ruled the action was time-barred under the New Mexico Hospital Lien Act, specifically NMSA 1978, Sections 48-8-1 to -7. The underlying facts include an accident on March 29, 1985, involving Vincent Lacey, who was treated at the University hospital and incurred $20,594.51 in expenses. The Regents filed a hospital lien notice on April 26, 1985, and received subsequent payments related to the case.
A check for $58,265.35 was issued by Liberty Mutual to Lacey's counsel on May 28, 1986. After the Regents refused a request for a reduced payment for hospital expenses, Lacey sent only $10,000 as full payment on January 15, 1987. The Regents filed suit on June 19, 1987, against Lacey and Liberty Mutual for debt and enforcement of their lien. Liberty Mutual moved to dismiss, citing that the statutory period for liability ended after the payment was made on May 28, 1986. The trial court affirmed this, dismissing the case with prejudice.
On appeal, the Regents argue that the mere tender of a release and two-party settlement check does not constitute "payment of any money" as defined under the statute, that a payment to an attorney is not the same as payment to a legal representative, and that a misrepresentation tolls the statute of limitations. The accompanying release form with the check specified conditions that needed to be fulfilled for it to be effective.
The check, endorsed by Lacey, was deposited into the law firm's trust account on November 6, 1986. The Regents were unaware of the check and its deposit until they were informed by Lines on the same day that the settlement with the insurance company had been finalized. The Regents argue that the one-year statutory period under Section 48-8-3(B) did not begin until November 10, 1986, as they believe payment requires the negotiation of the check by both Lacey and Lines, along with the execution of a release.
Legally, the delivery of a check does not automatically constitute payment unless the drawer has sufficient funds in the bank and the check is honored upon presentment. However, if the check is paid, the underlying debt is considered settled as of the delivery date. Various cases affirm that payment is considered made upon delivery of a check, provided it is later honored, thereby supporting the notion that payment for Section 48-8-3(B) occurred when Liberty Mutual delivered the check to Lines on May 28, 1986.
Importantly, the statute does not mandate the execution of a release to trigger the one-year limitation period. The delivery of the check to Lines, as Lacey's attorney, constitutes 'payment to the patient or legal representative' as outlined in Section 48-8-3(B). An attorney qualifies as a legal representative, defined as someone who acts on behalf of another, including overseeing their legal matters. Therefore, an attorney receiving payment is reasonable under the statute. The language of Section 48-8-3(B) supports that payment to either the patient or their legal representative initiates the statute of limitations.
A statute that establishes a new remedy also imposes a time limitation that restricts both the right and the remedy. Without any qualifying provisions, a party must adhere strictly to these limitations to seek the remedy. In this case, the Regents lost the right to pursue action after failing to act within the specified period starting May 28, 1986. The Regents argued that Liberty Mutual should be estopped from invoking the statute of limitations, but the court found the doctrine of equitable estoppel inapplicable. The essential elements required for estoppel were not met: Liberty Mutual did not engage in conduct that constituted a false representation or concealment of facts, nor did the Regents demonstrate ignorance of the statute of limitations or reliance on Liberty Mutual’s conduct. The Regents were aware that the statute began to run upon payment, which they learned about by November 1986, yet they did not file suit until June 1987. Consequently, the court affirmed the district court's judgment, with both parties responsible for their own costs and attorney fees.
