PA Court Requires Use of Longshore Benefits to Pay Spousal Support

On November 5, 2014, the Superior Court of Pennsylvania issued Uveges v. Uveges, a published opinion that addresses the intersection of family law and the Longshore and Harbor Workers’ Compensation Act’s (“LHWCA”) anti-assignment provision, 33  U.S.C. § 916.

The Facts–A Typical Family Law Case with a LHWCA Component:

The facts are fairly straight-forward.  The parties were married in 1972 and divorced in 2011.  While the divorce was pending, the parties entered into an alimony agreement whereby Husband would pay Wife “the sum of $2,500 per month for permanent alimony, modifiable only by remarriage, cohabitation, or the receipt by Wife of social security disability payments.”  Roughly six months after the divorce became final, Wife filed a petition to enforce the alimony agreement.  The trial court entered an order that “among other things provided for the attachment of Husband’s monthly benefits under the [LHWCA].”

Less than a month later, Husband’s prior Employer filed a petition for special relief, arguing that LHWCA benefits are exempt from attachment.  After a year-and-a-half of litigation, the trial “concluded on January 15, 2014 that the law permits an ex-spouse in Wife’s position to attach the [LHWCA] retirement or disability benefits of an ex-husband who has been found to be in contempt.”

The Law–LHWCA’s Anti-Assignment Provision:

The LHWCA’s anti-assignment provision is 33 U.S.C. § 916, which states:

No assignment, release, or commutation of compensation or benefits due or payable under this Act, except as provided by this Act, shall be valid, and such compensation and benefits shall be exempt from all claims of creditors and from levy, execution, and attachment or other remedy for recovery or collection of a debt, which exemption may not be waived.

Other state courts that previously analyzed the LHWCA’s anti-assignment provision determined that attachment was not allowed in a family court setting.  For instance, in Thibodeaux v. Thibodeaux, the Louisiana Supreme Court expressly stated that a wife could not garnish her ex-husband’s LHWCA benefits for past due child support.  See Thibodeaux v. Thibodeaux, 454 So. 2d 813 (La. 1985).  Then, in Spitalieri v. Spitalieri, 593 N.Y.S.2d 172, the Supreme Court of New York Richmond County, expressed sympathy for the plaintiff’s plight but nonetheless determined that LHWCA benefits could not be assigned.

At least one state court–before Uveges v. Uveges–allowed attachment of LHWCA benefits for child support purposes.  The District Court of Appeal of Florida, Third District, determined that child support payments could be withheld, and that the LHWCA’s anti-assignment provision was inapplicable to child support arrearages.  See Cigna Property & Casulaty v. Ruiz, 834 So. 2d 234 (Fla. 3 Dist. Ct. App. 2002).

The Reasoning–Why Uveges v. Uveges Allowed Attachment:

The Uveges court was persuaded by a Ninth Circuit decision, Moyle v. Dir., OWCP, and the Florida state appellate court’s Ruiz decision to support its conclusion that Wife could claim a portion of Husband’s LHWCA benefits.  In Moyle, the Ninth Circuit affirmed an administrative law judge’s decision that “disability benefits could be garnished to satisfy the recipient’s delinquent spousal support obligation.”  And, as mentioned before, the Ruiz court determined that Section 16’s anti-assignment provision applied to “claims of creditors” or “collection of a debt,” but a child support obligation was not a “debt.”

According to the Uveges court, Pennsylvania law has recognized that a spouse’s alimony or support obligation is not a “debt.”  As such, it follows that delinquent spousal support is not money owed to a “creditor,” and the delinquent money cannot be considered a “debt.”  As the court concluded:

In sum, because Husband’s LHWCA benefits are paid to him pursuant to federal law, and because Wife is not a “creditor” and Husband’s alimony obligation is not a “debt” under 33 U.S.C. section 916, the LHWCA benefits may be attached.  Additionally, we note our decision today is consistent with the historical treatment by Pennsylvania appellate courts of anti-attachment clauses vis-a-vis a claim for support or alimony.  We therefore affirm the trial court’s January 21, 2014 order attaching Husband’s LHWCA benefits for the payment of alimony.

Uveges v. Uveges, — A.3d —- (Pa. Super. Ct. 2014).

Move Over Apple, Here Comes DLHWC: Introduction to SEAPortal

The Office of Workers’ Compensation Programs (OWCP), Division of Longshore and Harbor Workers’ Compensation (DLHWC) has decided to step up its technology game. In an Industry Notice dated October 31, 2014, The DLHWC introduced its new secure electronic access portal known as SEAPortal. The portal, which is optional for stakeholders, is an OWCP sponsored web-based application that purports to streamline submission of claim-related documents.

The SEAPortal can be accessed at the OWCP/DLHWC website, or at https://seaportal.dol-esa.gov. Once accessed, a user need only provide: 1) the claim’s OWCP number; 2) the claimant’s last name; 3) claimant’s date of birth; and 4) the date of alleged injury. The SEAPortal then provides step-by-step instructions for uploading a file onto the system. The portal does not accept case creation longshore forms, such as LS-201, LS-202, LS-203, or LS-262, but does accept a variety of other documents including informal conference requests, formal hearing requests, settlement applications, special fund applications, copy requests, longshore forms, medical reports, other correspondence, and DOL vocational rehabilitation documents.

Once a document is uploaded onto the system, it will be assigned a Document Control Number (DCN) and reflect a status of either “received,” or “processed.” The Industry Notice advises that the Upload Date will be used for purposes of calculating deadlines.

While this system has so far proved to be efficient, there are some limitations to its use. For instance, the SEAPortal is only used to verify receipt of the document. The portal does not verify when, or if, the OWCP or another party have taken any action in the claim. The portal also does not act as service on other parties. Copies of documents will NOT be provided to other parties of record via SEAPortal; the parties must serve copies of the uploaded document on their own initiative. And lastly, the SEAPortal cannot be used to submit documents to the Office of Administrative Law Judges (OALJ) or the Benefits Review Board (BRB) as any documents must be sent directly to those entities per their respective instructions.

Based on our experiences thus far, we are encouraged by the technological advancements of the DLHWC. The SEAPortal is certainly a step, or an upload, in the right direction.

See http://www.dol.gov/owcp/dlhwc/lsindustrynotices/industrynotice148.htm for more information.

Section 8(i) Settlements Are Final and Cannot Be Modified

In this Benefits Review Board case, Claimant appealed the decision of the Administrative Law Judge approving her Section 8(i) settlement application on the grounds that her attorney and Employer’s attorney conspired against her to defraud her of benefits under the Act.  The findings of fact and conclusions of law of the administrative law judge will only be disturbed if they are not supported by substantial evidence, are not rational, and are not in accordance with the law.  The Benefit Review Board affirmed the Administrative Law Judge’s Decision and Order.

Claimant was injured on July 3, 2007.  Employer paid temporary total disability benefits.  Claimant subsequently settled her claim under the Longshore Act pursuant to a Section 8(i) settlement agreement for $22,500.00.  She also settled a Virginia state workers compensation claim for the same accident for an additional $22,500.00.  Claimant’s net recovery under both statutes was $36,000.00.  In exchange for an additional $50.00, Claimant signed a general release agreeing to release Employer from all claims arising under nine statutes including Title VII of the Civil Rights Act and the Age Discrimination in Employment Act.

In 2009, Claimant moved to amend her Section 8(i) settlement.  The administrative law judge refused to modify the settlement agreement under Section 22 of the Longshore and Harbor Workers Compensation Act.  Without representation, Claimant appealed the administrative law judge’s decision asserting that her attorney and employer’s counsel conspired to deprive her of her rights because she did not receive the amount of benefits from the settlement that she thought she would, her signature was fraudulently affixed to the documents, and she was deceived as to the release of her right to pursue a claim with the EEOC.

The BRB affirmed the administrative law judge’s finding that although Claimant presented evidence she was not homeless at the time of the settlement, her housing status had no connection to counsel’s representation, and Claimant did not establish how this information was used to defraud her.  Further, the BRB affirmed the administrative law judge’s finding that while Claimant allegedly did not receive the amount of settlement proceeds she expected, the administrative law judge rationally concluded the Claimant’s confusion did not establish fraud or mental incapacity warranting setting aside or modifying the settlement.  Claimant further contended she didn’t sign the settlement documents; she signed a separate piece of paper that was affixed to the settlement documents.  The administrative law judge found no merit in Claimant’s contentions, and the BRB affirmed.  With respect to the general release and Claimant’s right to pursue a claim with the EEOC, the administrative law judge and the BRB found neither had authority to modify a settlement pertaining to the release of rights granted by other statutes as it is not “in respect of” a claim under the Longshore Act.

The administrative law judge’s findings that Claimant did not substantiate her claim that Employer and her own attorney conspired to defraud her of benefits under the Act was rational and supported by substantial evidence.  Moreover, the administrative law judge correctly concluded Section 8(i) settlements are final and cannot be modified.  The BRB found no merit to Claimant’s appeal and affirmed the findings of the administrative law judge.

Cooper v. Northrop Grumman Shipbuilding, Inc., BRB No. 14-0039 (Aug. 5, 2014).

Is Sarbanes-Oxley Really This Fishy?

Next week the Supreme Court will hear arguments in Yates v. United States, a Sarbanes-Oxley anti-shredding case.  The Sarbanes-Oxley Act was enacted after the Enron scandal.  One of the provisions of the Act is commonly known as the “anti-shredding provision,” which criminalizes knowingly altering, destroying, mutilating, concealing, covering up, falsifying, or making a false entry in “any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration” of any federal matter.

Why am I mentioning Sarbanes-Oxley on a maritime blog?  Because Yates v. United States involves the federal government’s application of the “anti-shredding provision” to a commercial fisherman who directed his crewmen to throw undersized fish back into the sea, after receiving a civil citation and being told to bring the fish to dock to be destroyed.  That’s right…throwing fish back into the sea landed one fisherman in the Sarbanes-Oxley anti-shredding net.  Since then, the fisherman has lost his license, his boat, and his livelihood.

Take a look at this video from the National Association of Criminal Defense Lawyers (NACDL).  Really, take a look.  It’ll only take two minutes, and the video is really good:

Oral argument will be held on November 5, 2014.  So far, the fisherman has lost at the district court and the Eleventh Circuit.  Will the Supreme Court overturn?

For those who are interested in more reading, here are some links:

Brief of Petitioner, John L. Yates

Brief of Respondent, United States

Reply of Petitioner, John Yates

Mark Walsh, Fisherman convicted of violating Sarbanes-Oxley will be heard by the Supreme Court (published by the American Bar Association)

Tip of the hat to the NACDL, SCOTUSblog, and the ABA Journal.