Claimant Could Not Re-Open His Closed Case to Correct Section 33(g) Oversight

January 30, 2012 by

While Claimant was employed by Brown International (“Brown”) in Afghanistan, he was injured by employees of a third party, BAE Systems Land & Armament (“BAE”).  Claimant sued BAE and BAE then sued Brown for indemnity and negligence.  Eventually, Claimant settled his suit against BAE.  Brown and BAE settled their negligence claim, and BAE’s indemnity claim was dismissed.  An order was then issued dissmissing the action and closing the case “subject to the right of any party within sixty days to…re-open the action upon a showing of good cause.”  Claimant now tries to reopen the case.

Why?  Because of Section 33(g) of the Longshore and Harbor Workers’ Compensation Act.  Pursuant to Section 33(g), an injured worker must obtain his employer’s consent before settling with a tortfeasor for less money than the employer owes the worker in benefits.  Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469 (1992).  If the worker does not obtain the consent, he forfeits future benefits.  Further, an employer may assert a lien against the settlement sums to recoup previously paid benefits.  Here, Claimant did not obtain Brown’s consent before settling with BAE and Brown asserted its lien against Claimant’s settlement proceeds.

The court’s problem with Claimant’s request was that he did not show good cause for re-opening the action in abrogation of the court’s “sixty-day order.”  Claimant was simply trying to “protect his settlement money” but the “sixty day order” specifically declined to retain jurisdiction to enforce the settlement agreement.  Claimant’s new dispute about Section 33(g) belongs in a new action.

Ketchum v. BAE Systems Land & Armaments, No. 8:10-cv-2246-T-23TBM, 2012 WL 206976 (M.D. Fla. Jan. 24, 2012).

Note: Whenever dealing with third party settlements, Section 33(g) should be an utmost concern because, as the Supreme Court said, Section 33(g)’s “forfeiture penalty creates a trap for the unwary.”

Filed Under: Defense Base Act, Longshore

Fifth Circuit: Plaintiff’s Argument Misunderstands Nature of Review

January 27, 2012 by

In a recent unpublished decision, the United States Fifth Circuit Court of Appeals explained the nature of its review of the denial of a motion for new trial.  The plaintiff in the underlying case was injured while working on a commercial fishing vessel.  He filed a Jones Act negligence and unseaworthiness claim against his employer.  After a three-day jury trial, a unanimous verdict was returned in favor the employer.  The district court subsequently denied the plaintiff’s motion for new trial, finding the verdict was not against the great weight of the evidence.  The plaintiff appealed the district court’s denial of his motion for new trial.

On appeal, the Fifth Circuit noted several pieces of evidence in the record to support the jury’s verdict.  For example, the vessel’s captain testified that the plaintiff had violated company policy by attempting to moor the vessel while it was still moving.  The captain also testified that immediately following the accident, the plaintiff had remarked that it was a result of his own “dumb, stupid mistake.”  Further, the plaintiff had given a statement that the accident was not caused by an unseaworthy condition of the vessel.

The court commented in a footnote that the plaintiff seemed to concede that there was evidence to support the verdict.  However, the plaintiff argued that the evidence was not credible and should be disregarded.  The court took this argument as an indication that the plaintiff misunderstood the nature of its review.  The court explained that it was bound to accept the evidence in support of the verdict as true and that its task was to decide whether there is an “absolute absence” of evidence, not second guess the credibility determinations of the jury.  The Fifth Circuit affirmed the district court’s denial of plaintiff’s motion for new trial.

Filed Under: Fifth Circuit, General Maritime Law, Jones Act, Litigation

Register Now for Loyola’s Annual Longshore Conference

January 24, 2012 by

Registration is open for the Annual Longshore Conference, which is hosted every year by Loyola University New Orleans College of Law.  The conference is scheduled for March 15-16, 2012, and it will take place at the Sheraton Hotel New Orleans.  Loyola’s Annual Longshore Conference is by far the cream of the crop for longshore conferences.  It boasts a healthy attendance and knowledgeable speakers.  Visit Loyola’s website to register online, or use this form to register by mail, fax or e-mail.  Hope to see you there!

Filed Under: Longshore

Fifth Circuit Addresses Whether “Cure” Includes the Amount Charged by a Medical Provider or the Amount Accepted as Full Payment

January 20, 2012 by

The United States Court of Appeals, Fifth Circuit, issued an opinion discussing whether cure awarded in a Jones Act claim should include the amount medical providers charged or the amount they accepted as full payment from a plaintiff’s insurer.

In November 2006, Leon Manderson began working as a licensed engineer for Chet Morrison Contractors, Inc. (CMC) aboard a dive vessel operating in the Gulf of Mexico.  In January 2008, Manderson, aboard another CMC dive vessel, left abruptly and was hospitalized, receiving treatment for ulcerative colitis, diabetes, and a liver condition.  Manderson did not return to work. 

The United States District Court for the Western District of Louisiana awarded Manderson maintenance and cure and attorney’s fees incurred in obtaining that relief.  The court subsequently ruled CMC liable for $14,680.00 for maintenance and $169,691.06 for cure. 

On appeal, CMC challenged the district court’s application of the collateral-source rule for determining the amount of cure awarded Manderson.  In an issue of first impression, CMC contended that the cure award should not have included the difference between the amount of Manderson’s medical providers charged and the lesser amount they accepted from his insurer as full payment.  The Fifth Circuit applied a de novo review.   

Cure is the shipowner’s obligation to pay necessary medical services for seamen injured while in its service.  This obligation is an implied term of a maritime-employment contract and does not depend on any determination of fault. 

The collateral-source rule is a substantive rule of law that bars a tortfeasor from reducing the quantum of damages owed to a plaintiff by the amount of recovery the plaintiff receives from other sources of compensation that are independent of the tortfeasor.  Generally, in tort actions, the collateral-source rule prohibits a reduction of compensatory damages by the difference between the amount billed for medical services and the amount paid.  Yet, as previously mentioned, maintenance and cure is an implied term of contract for maritime employment and is not predicated on the fault or negligence of the shipowner.  Accordingly, because of the unique nature of maintenance and cure, normal rules of damages, such as the collateral-source rule in tort, are not strictly applied. 

Nevertheless, the Fifth Circuit has identified an exception to this general rule:  Where a seaman has alone purchased medical insurance, the shipowner is not entitled to a set-off from the maintenance and cure obligation moneys the seaman receives from his insurer.

Having found Manderson purchased his own medical insurance, the court¾consistent with the Fifth Circuit precedent¾made no deduction from the cure award for payments by Manderson’s insurer.  In doing so, the court found the amount of cure was the greater amount charged by Manderson’s health-care providers.  CMC contended that the appropriate amount for cure was the lesser amount those providers accepted as full payment from Manderson’s insurer, and the Fifth Circuit agreed.   

An injured seaman may recover maintenance and cure only for those expenses actually incurred.  The relevant amount is that needed to satisfy the seaman’s medical charges.  The Fifth Circuit stated, “This applies whether the charges are incurred by a seaman’s insurer on his behalf and then paid at a written-down rate, or incurred and then paid by the seaman himself, including at a non-discounted rate.”  Regardless of what Manderson’s medical providers charged, those charges were satisfied by the much lower amount paid by his insurer.  Consequently, the district court erred by awarding the higher charged (but not totally paid) amount. 

Though Manderson’s payment of health-insurance premiums benefitted CMC, this benefit was not a problem here, where fault was not an issue and CMC was liable only for maintenance and cure.  By using the amount paid by Manderson’s health insurer, rather than the amount charged, the Fifth Circuit held Manderson entitled to recover $71,085.79 for cure, resulting in a difference of $98,605.27.

Manderson v. Chet Morrison Contractors, Inc., — F.3d —, 2012 WL 10541 (5th Cir. 01/03/12).

Filed Under: Fifth Circuit, Jones Act
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