N.M. Stat. § 52-5-13 (2026)

compensation judge.
    The lump sum payment agreement entered into between the worker or his
dependents and the employer shall be presented to the workers' compensation judge
for approval upon a joint petition signed by all parties and verified by the worker or his
dependents. The workers' compensation judge shall in every case assure that the
worker or his dependents understand the terms and conditions of the proposed
settlement, and he may require a hearing for that purpose. All parties shall have the
right to attend any such hearing and present testimony.

History: Laws 1986, ch. 22, § 39; 1989, ch. 263, § 81.

                                     ANNOTATIONS

Modifications of lump-sum settlements. — The workers' compensation
administration has continuing jurisdiction over both modification and enforcement of
lump-sum settlement agreements. Cruz v. Liberty Mut. Ins. Co., 1995-NMSC-006, 119
N.M. 301, 889 P.2d 1223.

Approval by workers' compensation judge in accordance with requirements of
this section and Section 52-5-14(A) NMSA 1978 is necessary to assure adherence to
the policies established by the legislature favoring periodic payments over lump sum
payments, requiring careful effort to assure that a worker or the dependents understand
the consequences of replacing periodic payments with a discounted lump sum amount,
and assuring that the settlement is fair, equitable, and consistent with the Worker's
Compensation Act. Paradiso v. Tipps Equip., 2004-NMCA-009, 134 N.M. 814, 82 P.3d
985, cert. denied, 2004-NMCERT-001.

Failure to ensure worker understood agreement. — Where worker, who was not
represented by counsel, filed a petition for lump sum payment and the workers’
compensation judge approved the petition without a hearing, the lump sum settlement
was unenforceable because the workers’ compensation judge failed to perform the
judge’s affirmative duty to ensure that the worker understood the lump sum settlement
agreement. Sommerville v. Southwest Firebird, 2008-NMSA-034, 144 N.M. 396, 188
P.3d 1147.

Stipulated compensation order that failed to comply with approval process was
invalid and unenforceable. — Where, in 2004, the parties entered into a stipulated
compensation order (SCO) to settle a dispute regarding worker’s entitlement to workers’
compensation benefits as the result of an accident and injuries to worker’s back that
occurred in 2002, and where there was no hearing by the workers’ compensation judge
(WCJ) to approve the provisions of the SCO or otherwise confirm worker’s knowledge of
the partial lump-sum settlement or any of the material facts contained therein, and
where, in 2014, employer filed a motion for a supplemental compensation order
(MSCO), the WCJ erred in granting the MSCO and in approving the SCO under 52-5-13
and -14 NMSA 1978, because the SCO was not in compliance with 52-5-12(C) NMSA
1978, and therefore the WCJ had no authority to approve the SCO containing a partial
lump-sum payment of benefits; the SCO was invalid and unenforceable. Baca v. State,
2017-NMCA-076, cert. denied.

Written agreements binding. — When an employer or insurer and an employee agree
to a lump-sum settlement for workers' compensation benefits, and that agreement is
reduced to writing and is signed, it becomes a binding expression of the parties' intent; a
lump-sum settlement agreement, however, must be submitted to the workers'
compensation administration for approval. Cruz v. Liberty Mut. Ins. Co., 1995-NMSC-
006, 119 N.M. 301, 889 P.2d 1223.