AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• The plaintiff, Dara Hem, was seriously injured in an accident and treated by the University of New Mexico Hospital (UNMH), which then recorded a lien for the medical services provided. An agreement was made between Hem's initial attorney and UNMH to reduce the lien amount in exchange for subrogating the attorney's statutory priority to settlement funds to UNMH. This case arose from a dispute over the enforceability of this agreement under the New Mexico Constitution, specifically whether it violated Article IV, Section 32, which concerns the extinguishment of debts owed to the state (paras 1, 5).

Procedural History

• United States District Court for the District of New Mexico: Certified two questions to the Supreme Court of the State of New Mexico regarding the constitutionality of an agreement between UNMH and a patient's attorney to reduce a lien in exchange for priority over settlement funds (para 1).

Parties' Submissions

• Turner & Associates, P.A. (Claimant-in-Interpleader): Argued that the agreement between UNMH and Hem's initial attorney is unconstitutional under Article IV, Section 32 of the New Mexico Constitution, thereby entitling the attorneys to collect fees and costs out of the interpleaded settlement funds prior to the satisfaction of the hospital lien (para 1).
• Regents of The University of New Mexico, on behalf of the public operation, University of New Mexico Hospital (Claimant-in-Interpleader): Contended that the agreement does not violate the New Mexico Constitution and that UNMH has priority over the settlement funds pursuant to the agreement (para 1).

Legal Issues

• Whether the first clause of Article IV, Section 32 of the New Mexico Constitution is a limitation applicable only to acts of the Legislature or applies to the State in general (para 2).
• Whether Article IV, Section 32 prohibits a state hospital from compromising a debt owed by a patient-debtor when the amount of the debt is not disputed but the patient-debtor’s ability to pay is doubtful, and the compromise agreement is supported by consideration (para 2).

Disposition

• The Supreme Court of the State of New Mexico held that the first clause of Article IV, Section 32 is strictly a limitation on the Legislature and does not apply to the State in general (para 3).
• The Court also held that Article IV, Section 32 does not prohibit UNMH from agreeing to compromise the amount owed by a patient-debtor (para 3).

Reasons

• VIGIL, Chief Justice, with MAES, BOSSON, CHÁVEZ, and DANIELS, Justices concurring: The Court determined that the first clause of Section 32 applies only to the Legislature, based on its plain language and precedent. It further concluded that the second clause of Section 32, which requires debts to the state to be extinguished by payment into the treasury or by proper court proceeding, does not prohibit UNMH from compromising on a debt. The Court overruled previous interpretations requiring a good faith dispute for such compromises, emphasizing the constitutional allowance for state entities to aid sick or indigent persons. The Court found that the federal district court's review of the agreement satisfies the requirement for a proper court proceeding, thereby allowing the compromise agreement to stand (paras 3-27).