N.M. Stat. § 52-5-17 (2026)

A. The right of any worker or, in case of his death, of those entitled to receive
payment or damages for injuries or disablement occasioned to him by the negligence or
wrong of any person other than the employer or any other employee of the employer,
including a management or supervisory employee, shall not be affected by the Workers'
Compensation Act [Chapter 52, Article 1 NMSA 1978] or the New Mexico Occupational
Disease Disablement Law [52-3-1 NMSA 1978], but the claimant shall not be allowed to
receive payment or recover damages for those injuries or disablement and also claim
compensation from the employer, except as provided in Subsection C of this section.

   B. In a circumstance covered by Subsection A of this section, the receipt of
compensation from the employer shall operate as an assignment to the employer or his
insurer, guarantor or surety of any cause of action, to the extent of payment by the
employer to or on behalf of the worker for compensation or any other benefits to which
the worker was entitled under the Workers' Compensation Act or the New Mexico
Occupational Disease Disablement Law and that were occasioned by the injury or
disablement, that the worker or his legal representative or others may have against any
other party for the injury or disablement.

   C. The worker or his legal representative may retain any compensation due under
the uninsured motorist coverage provided in Section 66-5-301 NMSA 1978 if the worker
paid the premium for that coverage. If the employer paid the premium, the worker or his
legal representative may not retain any compensation due under Section 66-5-301
NMSA 1978, and that amount shall be due to the employer. For the purposes of this
section, the employer shall not be deemed to pay the premium for uninsured motorist
coverage in a lease arrangement in which the employer pays the worker an expense or
mileage reimbursement amount that may include as one factor an allowance for
insurance coverage.

History: Laws 1986, ch. 22, § 43; 1987, ch. 235, § 51; 1989, ch. 263, § 85; 1990 (2nd
S.S.), ch. 2, § 59.

                                   ANNOTATIONS

The 1990 (2nd S.S.) amendment, effective January 1, 1991, added the Subsection A
and B designations, deleted "or employee" following "worker" four times in Subsections
A and B, added "except as provided in Subsection C of this section" at the end of
Subsection A, substituted "In a circumstance covered by Subsection A of this section"
for "In such case", and "that" for "which" twice in Subsection B, and added Subsection
C.

                        I.     GENERAL CONSIDERATION.

Section was not expanded to recognize an independent right to bring suit against a
third-party tortfeasor. Liberty Mut. Ins. Co. v. Salgado, 2005-NMCA-144, 138 N.M. 685,
125 P.3d 664.

This section provides a derivative right. Liberty Mut. Ins. Co. v. Salgado, 2005-
NMCA-144, 138 N.M. 685, 125 P.3d 664.

The legislature intended that (1) an injured workman (worker) shall not be denied the
right to recover damages caused by the negligence of a third person because he has
received workmen's (workers') compensation benefits for the same injury, but, (2) he
shall not be allowed to retain both the compensation benefits and the damages
recovered from such third person, and (3) the section, by operation of law, assigns to
the employer so much of the judgment or payments received from such third person as
the injured workman (worker) received as compensation benefits. Reed v. Styron, 1961-
NMSC-119, 69 N.M. 262, 365 P.2d 912.

This section plainly intends to prevent dual recovery, and an erroneous selection or
election of remedy should not be construed as forever terminating the right to receive
the benefits of the Workmen's (Workers') Compensation Act. The employer, or its
insurer, had the right to reimbursement of any amounts paid the employee, in the event
the employee successfully sued a third party but the right to indemnity is not such a
right as should operate to destroy the benefits of the workmen's (workers')
compensation statute. Brown v. Arapahoe Drilling Co., 1962-NMSC-051, 70 N.M. 99,
370 P.2d 816.

Purpose of Subsection C. — The plain language of the statute is evidence that the
legislature intended to prevent an employee's double recovery from discrete and
independent insurance coverage provided by the employer. Draper v. Mountain States
Mut. Cas. Co., 1994-NMSC-002, 116 N.M. 775, 867 P.2d 1157.

                        II.    RECOVERY FROM THIRD PARTY.

Workman (Worker) is indispensable party in suit to recover damages from a third
party tort-feasor under this section even though the employer's insurer has paid the
employee under the Workmen's (Workers') Compensation Act because it is the
workman (worker) who has the claim against the third party. Herrera v. Springer Corp.,
1973-NMCA-041, 85 N.M. 6, 508 P.2d 1303, rev'd on other grounds, 1973-NMSC-057,
85 N.M. 201, 510 P.2d 1072.

Compensation insurer not indispensable party to workmen's (workers') suit. — As
the right to collect is in the workman (worker), the compensation insurer does not own
the right to enforce liability and cannot release the third party from liability, and therefore
is not an indispensable party to the workmen's (workers') suit. Herrera v. Springer
Corp., 1973-NMCA-041, 85 N.M. 6, 508 P.2d 1303, rev'd on other grounds, 1973-
NMSC-057, 85 N.M. 201, 510 P.2d 1072.

The underlying concern with third party actions is that the claimant will receive a
"double recovery." Transp. Indem. Co. v. Garcia, 1976-NMCA-059, 89 N.M. 342, 552
P.2d 473, cert. denied, 90 N.M. 9, 558 P.2d 621.

Provisions for assignments valid. — Provisions of the Workmen's (Workers')
Compensation Act providing for assignments of personal injury causes of action are
valid. Motto v. State Farm Mut. Auto. Ins. Co., 1969-NMSC-178, 81 N.M. 35, 462 P.2d
620.

An insured can, through a subrogation clause, assign his cause of action, but the
insured must abide by the terms of the clause in order to collect. Motto v. State Farm
Mut. Auto. Ins. Co., 1969-NMSC-178, 81 N.M. 35, 462 P.2d 620.

Assignment of action. — An employee who receives compensation from employer's
insurer for an injury does not assign his entire cause of action against a third party for
damages. This question is determined by the Workmen's (Workers') Compensation Act.
Kandelin v. Lee Moor Contracting Co., 1933-NMSC-058, 37 N.M. 479, 24 P.2d 731.

Although the workmen's (workers') compensation statutes do not create a right of
subrogation or assignment in an insurer, but merely the right to reimbursement, a
claimant may voluntarily assign his rights to an insurer which may bring an action in its
own name against the party responsible for the workmen's (workers') injuries. Seaboard
Fire & Marine Ins. Co. v. Kurth, 1980-NMCA-112, 96 N.M. 631, 633 P.2d 1229, cert.
denied, 95 N.M. 426, 622 P.2d 1046 (1981).

Recovery from third-party not a bar to benefits. — Prosecution to judgment of a
third-party action is not a bar to subsequent collection of workers' compensation
benefits; if there is a problem with a satisfaction of the third-party claim, it does not go to
double recovery, it goes to the amount of reimbursement or credit to which the employer
is entitled. Montoya v. AKAL Sec., Inc., 1992-NMSC-056, 114 N.M. 354, 838 P.2d 971.

The decision in Montoya v. AKAL Sec., Inc., 1992-NMSC-056, 114 N.M 354, 838 P.2d
971, applied retroactively to allow an employee to continue to recover compensation
benefits notwithstanding her settlement of a third-party tort claim. Gutierrez v. City of
Albuquerque, 1995-NMCA-139, 121 N.M. 172, 909 P.2d 732, rev'd on other grounds,
1998-NMSC-027, 125 N.M. 643, 964 P.2d 807.

Debtor-creditor relationship where recovery against third party. — This section
creates a conditional debtor-creditor relationship. That condition is operative only if a
third party recovery is made by the claimant. Accordingly, the carrier cause of action,
upon the happening of the condition, is against the claimant and not the third party.
Transport Indem. Co. v. Garcia, 1976-NMCA-059, 89 N.M. 342, 552 P.2d 473, cert.
denied, 90 N.M. 9, 558 P.2d 621.

Carrier charged with proportionate share of costs for action against third party. —
Workmen's (Workers') Compensation Acts are to be liberally interpreted in favor of the
workman (worker). Where no guidance is given, fundamental fairness must be the
guidelines. In the instant case, it was the claimant who bore the burden of the expense
and risk of litigation of the third party action. It would be unduly burdensome on the
claimant to pay all of the expenses and by the same token it would unjustly enhance the
economic position of the carrier not to assess a portion of the costs against it.
Accordingly, the carrier should be charged with his proportionate share of the costs.
Transport Indem. Co. v. Garcia, 1976-NMCA-059, 89 N.M. 342, 552 P.2d 473, cert.
denied, 90 N.M. 9, 558 P.2d 621.

Employer's negligence as affecting his action against third party. — This statute
omits any mention of the situation where negligence of the employer is to be considered
as affecting the employer's right of action against a third party; thus, there is but one
cause of action, and the employer or his insurer is specifically granted reimbursement in
this single cause of action. Royal Indem. Co. v. Southern Cal. Petroleum Corp., 1960-
NMSC-053, 67 N.M. 137, 353 P.2d 358.

Consolidation of actions. — Where an insurer's cause of action has been
consolidated with employee's, against party causing employee's injury, the vacation of
such order of consolidation is erroneous. Kandelin v. Lee Moor Contracting Co., 1933-
NMSC-058, 37 N.M. 479, 24 P.2d 731.

Employer's share of attorneys' fees. — Determination of an employer's proportionate
share of attorney fees and costs incurred in an action against a third-party tortfeasor
must take into consideration both compensation benefits already paid and relief from
future workers' compensation liability. Trujillo v. Sonic Drive-In/Merritt, 1996-NMCA-106,
122 N.M. 359, 924 P.2d 1371.
Recovery of advanced litigation expenses by employer. — Reimbursement by the
worker of a proportionate share of litigation expenses advanced by the employer in an
action against a third-party tortfeasor was appropriate under Subsection B. Trujillo v.
Sonic Drive-In/Merritt, 1996-NMCA-106, 122 N.M. 359, 924 P.2d 1371.

Resolution of issues between workman (worker) and third party controls both the
rights and liabilities of the compensation insurer as if the workman (worker) obtains a
settlement, or recovers from the tort-feasor; the right to reimbursement is established,
and if the workman (worker) fails to recover, the right to reimbursement is lost. Herrera
v. Springer Corp., 1973-NMCA-041, 85 N.M. 6, 508 P.2d 1303, rev'd on other grounds,
1973-NMSC-057, 85 N.M. 201, 510 P.2d 1072.

Insurance company as party plaintiff. — If an insurance company, claiming a right to
reimbursement for funds expended, and the insurance carrier for the defendants, is not
allowed to become a party plaintiff, it will forfeit its rights to reimbursement under this
section. Varney v. Taylor, 1963-NMSC-036, 71 N.M. 444, 379 P.2d 84.

Insurance company can intervene. — An insurance company, claiming a right to
reimbursement for funds expended, can intervene as a party-plaintiff when the same
company is the insurance carrier for the defendants only under such conditions as
would properly protect all the parties to the litigation. Varney v. Taylor, 1963-NMSC-036,
71 N.M. 444, 379 P.2d 84.

Insurance company bound by judgment. — Whether or not an insurance company,
claiming a right to reimbursement for funds expended, can intervene as a party plaintiff
in a suit brought by decedent's survivors against defendant for which company is also
the insurance carrier, it will be bound by the judgment in such case. Varney v. Taylor,
1963-NMSC-036, 71 N.M. 444, 379 P.2d 84.

Insurance company not compelled to be party. — The workmen's (workers')
compensation insurance company is not "compelled by law" to be a party in an action
for damages against a third party. Schulte v. Baber Well Servicing Co., 1982-NMCA-
036, 98 N.M. 547, 650 P.2d 831, cert. denied, 98 N.M. 478, 649 P.2d 1391.

Assessment of costs against intervenor insurer. — It is within the informed
discretion of the trial court to assess costs against an insurer who intervenes in the
worker's suit against an alleged tortfeasor. Eskew v. National Farmers Union Ins. Co.,
2000-NMCA-093, 129 N.M. 667, 11 P.3d 1229.

Carrier cannot intervene until damages awarded. — The court erred by granting a
worker's compensation carrier leave to file a complaint-in-intervention for
reimbursement and by ordering the carrier's intervention into an underlying wrongful
death suit against a third-party defendant prior to a judgment for damages being
awarded the plaintiff. Fernandez v. Ford Motor Co., 1994-NMCA-063, 118 N.M. 100,
879 P.2d 101, cert. denied, 118 N.M. 90, 879 P.2d 91
Immunity of co-employee. — The immunity of an employee for an injury done to a
fellow employee is not limited to negligent injury; rather, the provisions of the
Workmen's (Workers') Compensation Act accord immunity for all causes of action, all
common-law rights and remedies, for negligence or wrong including intentional torts.
Gallegos v. Chastain, 1981-NMCA-014, 95 N.M. 551, 624 P.2d 60, overruled by
Delgado v. Phelps Dodge Chino, Inc., 2001-NMSC-034, 131 N.M. 272, 34 P.3d 1148.

Workman (Worker) giving release to third person. — A workman (worker) injured by
a third person while employed is at liberty to settle with the third person for any sum,
even less than he would have received under this act, but if he does, he may not
recover compensation. A release to the third person gives nothing to be assigned to the
employer. White v. N.M. Hwy. Comm'n, 1938-NMSC-060, 42 N.M. 626, 83 P.2d 457.

Applicable statute of limitations. — Where a workers' compensation insurer settles
with an injured worker, receives an assignment of his negligence cause of action to the
extent of the payment, and seeks reimbursement from a third party, the relevant statute
of limitations is not Section 37-1-4 (four-year period), which governs unspecified
actions, but Section 37-1-8 (three-year period), which governs actions for personal
injury, which begins to run on a subrogated insurer's action against a third-party
tortfeasor at the same time that the statute of limitations would begin to run on an action
by the insured, or his personal representative in the event of the death of the insured.
American Gen. Fire & Cas. Co. v. J.T. Constr. Co., 1987-NMCA-094, 106 N.M. 195, 740
P.2d 1179.

                               III.   REIMBURSEMENT.

This is a reimbursement statute and there is but a single cause of action in
employee, even though a part of the recovery is to be paid to the employer or his
insurer. Royal Indem. Co. v. Southern Cal. Petroleum Corp., 1960-NMSC-053, 67 N.M.
137, 353 P.2d 358.

This section is a reimbursement statute and provides a right of reimbursement for
benefits paid under the Workmen's (Workers') Compensation Act by an employer who is
negligent or whose negligence concurs with that of a third person in causing the injury.
There is only a single cause of action in the employee against the third person and the
right of the compensation insurance carrier to reimbursement follows the success or
failure of the employee against such third person. Reed v. Styron, 1961-NMSC-119, 69
N.M. 262, 365 P.2d 912.

The workers' compensation carrier's claim for reimbursement of proceeds paid is
against the worker and not the third party. St. Joseph Healthcare Sys. v. Travelers Cos.,
1995-NMCA-020, 119 N.M. 603, 893 P.2d 1007.

The insurers of the third-party tortfeasors had no affirmative duty to reimburse a
compensation insurance carrier directly when disbursing settlement proceeds even
though the insurers knew of the compensation carrier's rights; the latter's only statutory
right is the right to reimbursement from the settlement proceeds, to be enforced against
the employee. St. Joseph Healthcare Sys. v. Travelers Cos., 1995-NMCA-020, 119
N.M. 603, 893 P.2d 1007.

This section provides a right for reimbursement that derives from a worker's right to
recover damages from a negligent third party. Liberty Mut. Ins. Co. v. Salgado, 2005-
NMCA-144, 138 N.M. 685, 125 P.3d 664.

Formula for calculating employer reimbursement. – The employer's extent of
reimbursement for compensation paid is determined by identifying the nature and
purpose of the payments made by the employer and comparing the elements of the tort
recovery with those which are duplicative of the employer's compensation payments;
the total of the duplicative payments is the amount which must be reimbursed. Paradiso
v. Tipps Equip., 2004-NMCA-009, 134 N.M. 814, 82 P.3d 985, cert. denied, 2004-
NMCERT-001.

Receipt of benefits no bar to action against third-party. — Although the estate of
the deceased has received workmen's (workers') compensation benefits from the lessor
by means of a settlement agreement, the plaintiff is not denied the right to bring suit
against a third-party tort-feasor; moreover, the lessor's compensation carrier may gain
the right of reimbursement from the carrier-lessee depending on the success or failure
of the plaintiff at trial. Matkins v. Zero Refrigerated Lines, Inc., 1979-NMCA-095, 93
N.M. 511, 602 P.2d 195.

Recovery from third-party tort-feasor for full loss suffered. — Where a claimant has
sought relief from a third-party tort-feasor, the amount of the recovery is for the full loss
or detriment suffered by the injured party and makes him financially whole. Seminara v.
Frank Seminara Pontiac-Buick, Inc., 1980-NMCA-136, 95 N.M. 22, 618 P.2d 366.

Claimant receiving verdict from third party barred from subsequent
compensation claims. — Where claimant elects to sue third-party tort-feasor and
receives a verdict with a judgment of zero damages, he is then barred from making a
subsequent workmen's (workers') compensation claim. Seminara v. Frank Seminara
Pontiac-Buick, Inc., 1980-NMCA-136, 95 N.M. 22, 618 P.2d 366.

Having been made "financially whole" by a damage award, the plaintiff may not retain
both compensation benefits and the damages recovered. Strickland v. Roosevelt Cnty.
Rural Elec. Coop., 1982-NMCA-184, 99 N.M. 335, 657 P.2d 1184, cert. denied, 99 N.M.
358, 658 P.2d 433 (1983), and cert. denied, 463 U.S. 1209, 103 S. Ct. 3540, 77 L. Ed.
2d 1390 (1983).

Employer's right of reimbursement following joint tort. — Where a workman
(worker) has obtained a verdict against third party tortfeasors for a work-related injury
and the verdict, under comparative fault principles, includes a determination that the
employer is at fault and such fault is a proximate cause of the workman's (worker's)
injury, such a determination does not reduce or affect the employer's right to be
reimbursed for amounts paid in compensation and medical benefits. Taylor v. Delgarno
Transp., Inc., 1983-NMSC-052, 100 N.M. 138, 667 P.2d 445.

Employer entitled to reimbursement where employee sues third party tort-
feasors. — Once an employee has recovered a judgment against a third party tort-
feasor, that employee may not thereafter claim compensation for the same injury, and
the employer, or its insurer, has the right to reimbursement of any amounts paid the
employee, in the event the employee successfully sues a third party, since the intent of
the Workmen's (Workers') Compensation Act is to prevent double recovery. This is also
true where the employee settles the claim against the third party tort-feasor. Security
Ins. Co. v. Chapman, 1975-NMSC-052, 88 N.M. 292, 540 P.2d 222.

This section of the New Mexico Workmen's (Workers') Compensation Act has been
consistently interpreted as a reimbursement statute involving only one cause of action,
under which the workman (worker) sues the third party tort-feasor for the entire amount
of damages and the employer or insurer is reimbursed out of amounts received by the
workman (worker). Security Ins. Co. v. Chapman, 1975-NMSC-052, 88 N.M. 292, 540
P.2d 222.

Reimbursement limited to worker's duplicative recovery. — An employer is not
necessarily entitled to a full reimbursement from an employee's fair, but partial, tort
recovery, but is entitled to recoup the amount of a worker's duplicative recovery;
moreover, those amounts that the employee reasonably receives for injuries not
addressed by workers' compensation, such as pain and suffering, may not be recovered
by the employer. Gutierrez v. City of Albuquerque, 1998-NMSC-027, 125 N.M. 643, 964
P.2d 807.

Where an employee received workers' compensation benefits under the employer's
policy and also received benefits under the employer's uninsured motorist policy, the
employer was entitled solely to reimbursement and potential future offset credit for
those uninsured motorist benefits that duplicated the workers' compensation benefits
paid or to be paid to the employee. Chavez v. S.E.D. Labs., 2000-NMSC-034, 129 N.M.
794, 14 P.3d 532.

Right to reimbursement not waived by failure to participate in trial. — The insurer's
right to reimbursement is established by this section and that right is not waived by
failure to participate in the trial of the workman's (worker's) action against the third party.
Herrera v. Springer Corp., 1973-NMCA-041, 85 N.M. 6, 508 P.2d 1303, rev'd on other
grounds, 1973-NMSC-057, 85 N.M. 201, 510 P.2d 1072.

Payments presumed for original injury where there was no court determination as to
the compensation award or as to whether the compensation paid by the insurer was for
the original injury or for an alleged aggravation caused by an alleged improper blood
transfusion, and the employer's insurer paid the employee benefits which were less than
a total permanent award (paying him for a period and then discontinuing payments)
altogether, without a release having been obtained, the employee neither giving an
election in writing as required by Section 52-1-49 NMSA 1978 nor filing suit against the
employer for additional workmen's (workers') compensation benefits for the alleged
malpractice, but instead electing to sue the physicians, technicians and hospital; then
under the facts any payments made by the insurer to the employee must be presumed
to be benefits for his original injury, and it was not entitled to reimbursement from the
employee where he settled with the hospital and doctors. Security Ins. Co. v. Chapman,
1975-NMSC-052, 88 N.M. 292, 540 P.2d 222.

                     IV.    UNINSURED MOTORIST INSURANCE.

Recoveries based upon an employer-provided uninsured motorist policy, as
opposed to a third-party tort action, is a distinction without a difference for the purpose
of calculating the amount of reimbursement due an employer. Chavez v. S.E.D. Labs.,
2000-NMCA-034, 128 N.M. 768, 999 P.2d 412.

No offset for underinsured motorist insurance provider. — Subsection C of this
section does not entitle the uninsured or underinsured motorist insurance provider to a
credit for the amount of workers' compensation benefits that the employee was not
required to reimburse to the workers' compensation carrier by reason of a settlement
between the employee and the workers' compensation carrier; the settlement did not
implicate or affect the UIM insurer's responsibility under the UIM policy and the UIM
insurer remained liable for the full amount of UIM coverage to the extent of damages
proved by the employee. Mountain States Mut. Cas. Co. v. Vigil, 1996-NMCA-062, 121
N.M. 812, 918 P.2d 728.

Employee may retain difference from coverage benefits. — Subsection C does not
preclude an employee from retaining the difference between uninsured motorist benefits
and workers' compensation benefits, notwithstanding the fact that the employer has
paid the premiums for each coverage. The fact that the same insurer issued both
policies to the employer is immaterial. If the employee is an insured occupant of the
vehicle under the terms of the automobile policy, he is entitled to recover the proceeds
of the uninsured motorist coverage subject only to his employer's statutory right to
reimbursement for the workers' compensation benefits that it has paid. Draper v.
Mountain States Mut. Cas. Co., 1994-NMSC-002, 116 N.M. 775, 867 P.2d 1157.

Estate of deceased worker not entitled to recover under employer’s uninsured
motorist insurance. — Where estate of decedent sought to recover damages under
decedent’s employer’s uninsured/underinsured motorist coverage after decedent was
killed in the course of his employment by a co-worker operating an employer-owned
motor vehicle, decedent’s estate was not entitled to recover damages under the
employer’s uninsured motorist insurance, because the uninsured motorist statute, 66-5-
301(A) NMSA 1978, only benefits persons "legally entitled to recover damages from
owners or operators of uninsured motor vehicles", and under the Workers’
Compensation Act (WCA), 52-1-1 to -70 NMSA 1978, an employee who was injured in
a workplace accident caused by an employer or its representative may only seek a
remedy authorized under the WCA, and under the WCA such a employee is not legally
entitled to recover damages under the uninsured motorist statute. Vasquez v. American
Cas. Co. of Reading, 2017-NMSC-003.

Law reviews. — For survey of 1990-91 workers' compensation law, see 22 N.M.L. Rev.
845 (1992).

For note, "Pursuing the 'Benevolent Purpose' of New Mexico's Workers' Compensation
Statute as a Reimbursement Statute: Montoya v. AKAL Sec., Inc.," see 24 N.M.L. Rev.
577 (1994).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 82 Am. Jur. 2d Workmen's
Compensation §§ 429 to 432.

Right of workers' compensation insurer or employer paying to a workers' compensation
fund, on the compensable death of an employee with no dependents, to indemnity or
subrogation from proceeds of wrongful death action brought against third-party
tortfeasor, 7 A.L.R.5th 969.

101 C.J.S. Workmen's Compensation §§ 992 to 1011.