2021 New Mexico Statutes
Chapter 41 - Torts
Article 1 - Settlements, Releases and Statements
Section 41-1-1 - Settlements, releases and statements of injured patients; acknowledgement required; notice.

A. No person whose interest is or may become adverse to a person injured who is either under the care of a person licensed to practice the healing arts, or confined to a hospital or sanitarium as a patient shall, within fifteen days from the date of the occurence [occurrence] causing the person's injury:

(1) negotiate or attempt to negotiate a settlement with the injured patient; or

(2) obtain or attempt to obtain a general release of liability from the injured patient; or

(3) obtain or attempt to obtain any statement, either written or oral[,] from the injured patient for use in negotiating a settlement or obtaining a release.

B. Any settlement agreement entered into, any general release of liability or any written statement made by any person who is under the care of a person licensed to practice the healing arts or is confined in a hospital or sanitarium after he incurs a personal injury, which is not obtained in accordance with the provisions of Section 2 [41-1-2 NMSA 1978] of this act, requiring notice and acknowledgement, may be disavowed by the injured person within fifteen days after his discharge from the care of the persons licensed to practice the healing arts or his release from the hospital or sanitarium, whichever occurs first, and such statement, release or settlement shall not be evidential in any court action relating to the injury.

C. Any settlement agreement, any release of liability or any written statement shall be void unless it is acknowledged by the injured party before a notary public who has no interest adverse to the injured person.

History: 1953 Comp., § 21-11-1, enacted by Laws 1971, ch. 70, § 1.

Bracketed material. — The bracketed material was inserted by the compiler and it is not part of the law.

Adverse or potentially adverse parties. — On its face, the Release Act pertains only to adverse or potentially adverse parties and prevents those parties from obtaining statements from injured patients for the purpose of settlement or release. Apodaca v. AAA Gas Co., 2003-NMCA-085, 134 N.M. 77, 73 P.3d 215, cert. quashed, 2004-NMCERT-003, 135 N.M. 321, 88 P.3d 263.

An OSHA compliance officer conducting a routine interview in the normal course of business is not an adverse party within the meaning of the Release Act, despite the plaintiffs' contention that OSHA was potentially an "adverse party" in the sense that the OSHA report blamed the injured plaintiffs and/or their co-employees for the accident causing the injuries. Apodaca v. AAA Gas Co., 2003-NMCA-085, 134 N.M. 77, 73 P.3d 215, cert. quashed, 2004-NMCERT-003, 135 N.M. 321, 88 P.3d 263.

Restrictions on care of injured person. — While this section does not state that the care of an injured person by one licensed to practice the healing arts must be actual and continuous, nor does it limit the time within which the care must be provided, this section is restrictive in that care must be provided in good faith and must be reasonably required. Bolles v. Smith, 1979-NMSC-019, 92 N.M. 524, 591 P.2d 278.

Effect of acknowledgment requirement. — The statutory requirement of an acknowledgment does not impair the obligation of the contract; the acknowledgment is an integral part of the contract. It is a "restrictive safeguard," but does not prohibit a defendant from obtaining a valid release, nor does it restrain the freedom of the parties to contract. Mitschelen v. State Farm Mut. Auto. Ins. Co., 1976-NMCA-093, 89 N.M. 586, 555 P.2d 707, cert. denied, 90 N.M. 9, 558 P.2d 621.

Settlement of lawsuit by attorney with specific authority to settle is binding on the client. Gonzales v. Atnip, 1984-NMCA-128, 102 N.M. 194, 692 P.2d 1343, cert. denied, 102 N.M. 225, 693 P.2d 591 (1985).

For attorney to bind client to settlement agreement, the attorney must have specific authority to do so, unless there is an emergency or some overriding reason for enforcing the settlement despite the attorney's lack of specific authority. Bolles v. Smith, 1979-NMSC-019, 92 N.M. 524, 591 P.2d 278.

Effect of rejection of settlement agreement. — An oral settlement agreement entered into by an injured person's attorney on the injured person's behalf cannot be enforced where it was rejected by the injured person prior to its approval by the court or its dismissal under Rule 41(a)(1) or (2), N.M.R. Civ. P., (now Rule 1-041 NMRA). Bolles v. Smith, 1979-NMSC-019, 92 N.M. 524, 591 P.2d 278.

Settlements subject to rescission. — Any settlement procured by the fraud, artifice or overreaching of the insurer's agent is subject to rescission even if not disavowed in a timely fashion, pursuant to Subsection B. Ponce v. Butts, 1986-NMCA-042, 104 N.M. 280, 720 P.2d 315.

Notary publics. — Acknowledgment before a notary public is part of the release and necessary to its validity. Mitschelen v. State Farm Mut. Auto. Ins. Co., 1976-NMCA-093, 89 N.M. 586, 555 P.2d 707, cert. denied, 90 N.M. 9, 558 P.2d 621.

Noncompliance with Subsection C. — Noncompliance with Subsection C renders the settlement agreement and any release of liability invalid. Catalano v. Lewis, 1977-NMCA-016, 90 N.M. 215, 561 P.2d 488, cert. denied, 90 N.M. 254, 561 P.2d 1347.

A release cannot be set aside for mistake. Thus, although plaintiff's injury was more serious than originally believed, the release could not be set aside. Ponce v. Butts, 1986-NMCA-042, 104 N.M. 280, 720 P.2d 315.

Release invalid when not acknowledged by claimant. — A release of liability with respect to bodily injury claims prepared by an insurer and signed without acknowledgment by a claimant while under a doctor's care is invalid. Bolles v. Smith, 1979-NMSC-019,92 N.M. 524, 591 P.2d 278.

Oppressive conduct by insured not condoned. — With the Release Act [41-1-1, 41-1-2 NMSA 1978], the legislature has not expressed condonation of oppressive conduct on the part of the insured; the insurer is protected by law if it can prove the insured fabricated a claim. Mitschelen v. State Farm Mut. Auto. Ins. Co., 1976-NMCA-093, 89 N.M. 586, 555 P.2d 707, cert. denied, 90 N.M. 9, 558 P.2d 621.

Conflicts of law. — Where plaintiff, who was a resident of Minnesota, signed a release of a workers' compensation claim in Minnesota and the workers' compensation claim arose out of an injury that occurred while plaintiff was a resident of and working in New Mexico and that was initially treated in New Mexico, the policy underlying 41-1-1 NMSA 1978 and the protections guaranteed by the statute required the application of New Mexico law. Ratzlaff v. Seven Bar Flying Services, Inc., 1982-NMCA-071, 98 N.M. 159, 646 P.2d 586, cert. denied, 98 N.M. 336, 648 P.2d 794.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 7 Am. Jur. 2d Attorneys at Law §§ 156, 157; 15A Am. Jur. 2d Compromise §§ 3, 20, 23, 41; 66 Am. Jur. 2d Release §§ 1, 20.

Discretion of court to vacate its approval of release in respect to minor, 8 A.L.R.2d 460.

Avoidance of release of personal injury claims on ground of fraud or mistake as to the extent or nature of injuries, 71 A.L.R.2d 82, 13 A.L.R.4th 686.

Release of one responsible for injury as affecting liability of physician or surgeon for negligent treatment of injury, 39 A.L.R.3d 260.

Insurer's tort liability for acts of adjuster seeking to obtain settlement or release, 39 A.L.R.3d 739.

Modern status of rules as to avoidance of release of personal injury claim on ground of mistake as to nature and extent of injuries, 13 A.L.R.4th 686.

15A C.J.S. Compromise § 34 et seq.; 25 C.J.S. Damages § 81; 37 C.J.S. Fraud §§ 41, 93; 76 C.J.S. Release § 1 et seq.