by Matthew H. Ammerman on August 4th, 2017

Last responsible employer fights under the LHWCA often look like pin the tail on the donkey. If the LHWCA’s Section 20 presumption is invoked against a later employer because it exposed an injured worker to harm or stimuli that “could have” aggravated the original injury and that employer cannot rebut the presumption, it is liable even if a previous employer may have caused the harm. The result in last responsible employer cases may defy common sense – such as a later employer pinned with responsibility for a worker’s longstanding cumulative knee injury after only one day of work.[1] In occupational disease cases, the widely-adopted Cardillo[2] rule provides that the responsible employer is the last employer during whose employment the worker was exposed to injurious stimuli prior to the date the employee became aware of employment-connected occupational disease.

The later employer was not pinned, however, in the Fifth Circuit’s decision in Bollinger Shipyards, Inc. v. Dir., OWCP [Worthey].[3] Kenneth Worthey was a welding supervisor for Bollinger Shipyards on and off for 15 years and was exposed to welding fumes, dust, and chemicals. In 2008, Robert Bourgeois, M.D., told Worthey he could no longer wear a respirator due to breathing problems. On March 22, 2010, Dr. Bourgeois told Worthey he had chronic obstructive pulmonary disease (COPD). The doctor told Worthey he could not return to work and recommended he apply for Social Security Disability.

Instead, Worthey applied for work with another employer – Thoma-Sea – the same day.[4] He worked for Thoma-Sea for two months as a welding supervisor until he was fired for sleeping on the job. Worthey asserted claims against Bollinger and Thoma-Sea, and, after two trials, the administrative law judge (ALJ) found that Thoma-Sea rebutted the presumption and Bollinger was solely liable for LHWCA benefits.

Though the evidence was mixed, the ALJ credited a post-Thoma-Sea pulmonary function test that was identical to the test he took when he stopped working for Bollinger, indicating no new harm. Worthey’s testimony and medical tests also supported the finding that Worthey’s condition resulted from work with Bollinger. The ALJ found and the Fifth Circuit affirmed that Worthey’s condition was not aggravated by his two months of work with Thoma-Sea.

The Fifth Circuit also takes a shot at the Benefits Review Board’s insistence that both employers rebut the presumption, which here led to a second trial. The court was puzzled why that was necessary if the ALJ first determined Worthey was aware of his disease and disability on March 22, 2010, when he left Bollinger and was advised he should stop work. The Board could have held that finding was sufficient to rebut the presumption against the later employer – even if the ALJ did not work through that procedural exercise. The Fifth Circuit also rejected Bollinger’s argument that Worthey’s disability date was later than March 22, 2010, because he worked for Thoma-Sea thereafter. That might have helped Bollinger under the Cardillo rule because then Thoma-Sea would have been the last employer prior to Worthey’s awareness of his disease. But that argument was not raised before the Board. And it was contrary to the evidence showing Worthey was first aware of his COPD and disability by Dr. Bourgeois when he stopped working for Bollinger. His several weeks of work with Thoma-Sea thereafter did not change that.[5]
___________________

[1] Metro. Stevedore Co. v. Crescent Wharf & Warehouse Co. [Price], 339 F.3d 1102, 1107 (9th Cir. 2003), cert. denied, 543 U.S. 940, 125 S. Ct. 309, 160 L. Ed. 2d 248, 2004 U.S. LEXIS 6914 (U.S., Oct. 12, 2004) (“However, there is inherent virtue in the "last responsible employer" rule. Each employer subject to the LHWCA shares the risk that it will bear the burden of compensation at one point or another, even if it was not predominantly responsible for the compensable injury. The unfairness to the last employer is mitigated by two factors: the spreading of the risk through mandatory insurance, and the availability of the second injury fund to the last employer in some cases.”).
[2] Travelers Insurance v. Cardillo, 225 F.2d 137, 145 (2d Cir. 1955)(“Thus we conclude that the Congress intended that the employer during the last employment in which the claimant was exposed to injurious stimuli, prior to the date upon which the claimant became aware of the fact that he was suffering from an occupational disease arising naturally out of his employment, should be liable for the full amount of the award.”).
[3] No. 16-60370, 2017 U.S. App. LEXIS 8842, 2017 WL 2196736 (5th Cir. 2017).
[4] Worthey v. Bollinger Shipyards, Inc., 50 BRBS 59(UBD)(2016).
[5] Bollinger Shipyards, Inc., 2017 U.S. App. LEXIS 8842, at *6.


by Matthew H. Ammerman on July 16th, 2017

The first appellate opinion dealing directly with post-Valladolid application of OCSLA comes from the Fifth Circuit in Baker v. Director, OWCP, 834 F.3d 542 (5th Cir. 2016). But the primary issue was whether the LHWCA directly covered the worker’s alleged injury.[1] More specifically, the question is whether the injured worker was engaged in maritime employment, which hinged on whether the tension leg platform Big Foot was a vessel within the meaning of the LHWCA.

 James Baker was a marine carpenter at a shoreside yard in Houma, Louisiana, owned by Gulf Island Fabricators. Baker was employed by Gulf Island for 8 months. He was injured on October 22, 2012, while working on land on topside living quarters the Big Foot, which was designed to work on the Outer Continental Shelf. Baker sought benefits under the LHWCA directly, or, alternately, under OCSLA.

Baker worked on land with the exception of a few boat rides across a canal to a shoreside meeting place. Therefore, to meet the requirements of statutory LHWCA coverage, he had to meet the LHWCA’s situs[2] and status requirements.[3] Situs was easily satisfied because he worked in a shipyard adjoining navigable waters. But the LHWCA’s § 902(3) requires that the worker be engaged in maritime employment, specifically, longshoring operations, a ship repairman, shipbuilder, or ship-breaker.[4] Baker had to be working on a component of a “vessel” as defined by general maritime law to meet the status requirement.

The Big Foot, a tension leg platform, would not be a vessel when at work as a floating production platform tethered to the seabed of the Gulf of Mexico under Fifth Circuit law. In a series of decisions, the Fifth Circuit holds that tension leg platforms or other floating production platforms that are secured to the seabed are not vessels[5]

Baker, however, argued that the Big Foot would have two lives. First, the structure would be a vessel as it was transported by navigable waters for construction and then carried out to sea to be set up as a floating production platform. Second, once the Big Foot was set up and secured to the seabed on the OCS, Baker argued it would lose its vessel status.

The Fifth Circuit first works through the yin and yang of the U.S. Supreme Court’s Stewart[6] and Lozman[7] cases. The dredge Super Scoop at issue in Stewart was slow and massive but had characteristics common to seagoing vessels like a captain, crew, navigational lights, ballast tanks, and a crew area. The Super Scoop also had means of self-propulsion. It was a vessel because it was not just “capable of being used  [] as a means of transportation on water” – it was in fact used to transport equipment and workers over water.[8] The house boat at issue in Lozman floated, had been towed, and was capable of incidentally carrying people or things over water.[9] But the Supreme Court reasoned that the house boat was not a vessel because it was not “designed to any practical degree to transport persons or things over water.”[10] That distinguished Lozman’s house boat from the Super Scoop, which was regularly – though not primarily – used to transport workers and equipment over water.[11]
 
The Fifth Circuit holds the Big Foot is more like Lozman’s house boat than the Super Scoop, and, consequently, is not a vessel regardless of whether it floats and has or will be towed.[12] The Big Foot has no means of self-propulsion, no steering mechanism, rudder, and has an unraked bow. The Big Foot is required to carry a captain and crew when towed, but the crew will only be present to ensure Big Foot's transport to its permanent location on the OCS. The Big Foot was designed to be secured to the bed of the Gulf of Mexico with sixteen miles of tendons and stay there for approximately twenty years during the life of the formation. It is only intended to travel over water once in that time to reach the Shelf. Invoking the “reasonable observer” test from Lozman, the Fifth Circuit holds a reasonable observer would conclude the tension leg platform’s physical characteristics and activities is not a vessel.[13]  
  
The Fifth Circuit then harkens back to its “work platform” test from cases such as Bernard v. Binnings Constr. Co., Inc.[14] to make the point that its holding is consistent with its pre-Stewart cases as well. In Bernard v. Binnings, a work punt was not a vessel because it functioned as a work platform and did not have substantial vessel characteristics.[15]
  
At bottom, the Big Foot is not a vessel, therefore, Baker’s landside injury was not LHWCA-covered because he was not engaged in maritime employment and could not meet the status requirement.[16]
 
The Fifth Circuit similarly rejects Baker’s alterate theory of LHWCA coverage -- the application of OCSLA pursuant to the Supreme Court’s “substantial nexus” test from the Valladolid case.[17] To meet that test, the worker must show a “significant causal link between the injury and his employer’s on-OCS operations ….,” a question left to the individual circumstances of each case.[18] In Baker’s case, the ALJ found that the living quarters topside on which Baker worked was not unique to OCS operations, though the particular topside at issue was intended for use on the Shelf. Also, unlike the worker in the Valladolid case, Baker only worked on land, whereas the worker in Valladolid worked on the Shelf ninety-eight percent of his time. The ALJ further found that Baker’s employer, Gulf Island Fabricators, would have no role in the installation or operation of the Big Foot on the Shelf. The Fifth Circuit held those findings were supported by substantial evidence, and, consequently, that Baker failed to show a significant causal link between his injury and his employer’s on-OCS operations.[19]

The Fifth Circuit rejected LHWCA coverage of Baker’s injury, directly and through OCSLA’s extension.

[1] 33 U.S.C. §§ 902(3), 903(a).
[2] 33 U.S.C. § 903(a).
[3] 33 U.S.C. § 902(3).
[4] Id.
[5] Fields v. Pool Offshore, Inc., 182 F.3d 353, 358 (5th Cir. 1999), cert. denied, 528 U.S. 1155 (2000)(offshore spar); Cain v. Transocean Offshore USA, Inc., 518 F.3d 295, 299-302 (5th Cir. 2008)(incomplete semi-submersible)(“We further think the preclusion from vessel status of crafts still under construction serves several important goals and is consistent with the concern for avoiding uncertainties and possible oscillation in and out of Jones Act status….”), cert. denied, 555 U.S. 880 (2008); Warrior Energy Servs. Corp. v. ATP Titan M/V, 551 Fed. Appx. 749, 750 (5th Cir. 2014)(tension leg platform)(The TITAN, a floating oil and gas production facility moored on the Outer Continental Shelf, is not a vessel in maritime lien case); Abram v. Nabors Offshore Corp., 2010 U.S. Dist. LEXIS 79518 (S.D. Tex. 2010)(Harmon, J.), aff’d, 439 Fed. Appx. 347, 348 (5th Cir. 2011)(tension leg platform).
[6] Stewart v. Dutra Constr. Co., 543 U.S. 481, 488-90, 125 S.Ct. 1118, 160 L.Ed. 932 (2005).
[7] Lozman v. City of Riviera Beach, 133 S.Ct. 735, 184 L.Ed.2d 604 (2013).
[8] Baker, 834 F.3d 542, 546 (5th Cir. 2016)(emphasis added), citing Stewart, 543 U.S. 481, 495 (2005).
[9] Baker, 834 F.3d 542, 547 (5th Cir. 2016), citing Lozman, 133 S.Ct. 735, 740 (2013).
[10] Id., 834 F.3d at 547 (5th Cir. 2016), citing Lozman, 133 S.Ct. at 741.
[11] Id., 834 F.3d at 547 (5th Cir. 2016), citing Lozman, 133 S.Ct. at 743.
[12] Id. at 547.
[13] Id. at 547, citing Lozman, 133 S. Ct. at 741.
[14] Id., citing 741 F.2d 824 (5th Cir. 1984)
[15] Id., 834 F.3d 547-548, citing Smith v. Massman Constr. Co., 607 F.2d 87, 89 (5th Cir. 1979),(caisson was not a vessel in large part because the caisson's "transportation of men and material, if any occurred, was incidental" to its purpose of "being both a form for concrete in a bridge pier and a part of the pier itself, not for the purpose of being a . . . vessel."); See also Blanchard v. Engine & Gas Compressor Servs., Inc., 575 F.2d 1140, 1141-43 (5th Cir. 1978) (buildings mounted on virtually permanently sunken barges were not vessels); Warrior Energy Servs. Corp. v. ATP Titan M/V, 551 F. App'x 749, 752 (5th Cir. 2014) (floating oil and gas production facility moored to the floor of the OCS was not a vessel under 1 U.S.C. § 3 because it was "not practically capable of transportation on water").
[16] Id. at 546.
[17] Id. at 548 citing Pacific Operators Offshore, LLP v. Valladolid, 565 U.S. 207, 132 S.Ct. 680, 691, 181 L.Ed. 2d 675 (2012).
[18] Id. at 548-549, citing Valladolid, 132 S.Ct. 680, 690-691 (2012).
[19] Id. at 549.
 

by Matthew H. Ammerman on July 1st, 2017

In disputes under a master service agreement (MSA), it seems the little guy is always left holding the bag. Not here. The Fifth Circuit affirms the district court’s summary judgment that a chase vessel working in tandem with the negligent tow vessel did not owe indemnity for an allision. But the insurance coverage question was separate from indemnity under the MSA.

The M/V Deepwater Nautilus, a semi-submersible drilling rig, was working for Shell in the Gulf of Mexico. Nearby, offshore survey company Tesla was conducting a sonar survey using a chartered tow vessel, the M/V International Thunder, and a chase vessel, the F/V Lady Joanna. The Thunder was owned and operated by International, and the Joanna was chartered for Tesla by Integrity Fishers, Inc. and was owned and operated by Sea Eagle Fisheries, Inc.

The Thunder towed a signal-emitting, submerged “towfish” using a 2-mile-long cable, and the chase vessel Joanna stayed above and monitored the towfish. Tesla had to reel the towfish onto the deck of the Thunder for repairs. While work was under way, the Thunder turned north to go back to the grid being surveyed, and the Joanna followed. The captain of the Joanna warned the Tesla party chief approximately 30 to 45 minutes prior to the allision that the Thunder was too close to the Nautilus. The party chief in turn notified the Thunder, who did not heed the warning. The Thunder’s tow line hit a submerged mooring line for the Nautilus causing significant damages.

Shell sued Tesla and the Thunder’s owner, International, for negligence. The jury awarded $9M to Shell and found Tesla 75% and International 25% at fault.

Tesla and International sued Integrity and Sea Eagle for indemnity. There were two MSAs involving Tesla, International, Integrity and Sea Eagle with nearly identical provisions. The MSAs provide that Integrity/Sea Eagle must indemnify for damage “arising out of or related in any way” to the operation of its vessels, here, the Joanna. The district court granted Integrity and Sea Eagle’s motions for summary judgment because Shell’s claims for damages against Tesla and International for the Nautilus’s damaged mooring line did not arise out of or relate to the operation of the Joanna. Consequently, in the eyes of the district court, Integrity and Sea Eagle’s insurers did not cover the incident either.

The Fifth Circuit agreed that the allision of the Thunder’s tow line with the Nautilus’ mooring line did not “arise out of” or relate to the operation of the chase vessel Joanna. The Joanna’s job was to stay above the towfish, which it did. The Joanna’s captain’s gratuitous warning to the Thunder did not implicate the Joanna -- her operation did not cause the accident. The Thunder was the vessel whose tow line hit the Nautilus. The Fifth Circuit affirmed the no-indemnity summary judgment in favor of Integrity and Sea Eagle. In doing so, the court acknowledged that “arising out of” indemnity obligations should be construed broadly. It is only when a party’s contractual performance is “completely independent” of another party’s negligence act would no indemnity be owed.

However, Integrity and Sea Eagle’s insurers may owe coverage to Tesla and International. The MSAs provide that Integrity and Sea Eagle must provide insurance coverage for “third party claims arising out of or connected with the performance of Service thereunder” and name Tesla and its contractors as additional insureds. Those insurance obligations were specified to be “independent of” the indemnity requirements. Though connected, the scope of insurance coverage is determined by the language of the insurance policy obtained – not the MSA itself.

Surprisingly, none of the insurance policies were in the appellate record. Tesla and International may be owed insurance as additional insureds  under Integrity/Sea Eagle's policies, but the Fifth Circuit was unable to determine insurance coverage. The panel vacated summary judgment on Tesla and International’s insurance claims and remanded to the district court.
 
Int'l Marine, L.L.C. v. Integrity Fisheries, Inc., No. 16-30456, 2017 U.S. App. LEXIS 11041 (5th Cir. 2017).


by Matthew H. Ammerman on June 25th, 2017

On February 22, 2014, the M/V HANNAH C. SETTOON was pushing two oil tank barges downstream on the Mississippi River near Convent, Lousiana. The HANNAH called ahead to Marquette’s M/V LINDSAY ANN ERICKSON, which was pushing 21 loaded grain barges, and worked out an arrangement to pass the LINDSAY on her stern while she held steady against the east bank.

While the HANNAH was pushing her two tank barges downstream past the LINDSAY, the HANNAH seemingly released LINDSAY from the arrangement. The LINDSAY reversed and collided with the HANNAH’s tow. Seven hundred and fifty barrels of crude oil from a tank barge spilled into the river.

Settoon Towing owned the HANNAH and was strictly liable for cleanup costs as the “Responsible Party” under the Oil Pollution Act (OPA), 33 U.S.C.S. § 2701, et seq. Settoon filed a vessel owner’s Limitation of Liability action in the Eastern District of Louisiana, 46 U.S.C. §§ 30501-30512, and Marquette filed a claim. Settoon filed a counterclaim against Marquette seeking contribution to the extent of Marquette’s fault. The district court determined both parties were at fault and apportioned 65% of the fault for the collision to the owner of the LINDSAY, Marquette, and 35% to the owner of the HANNAH, Settoon.

The district court held that Settoon had a statutory claim for contribution under OPA against Marquette. Consequently, the general maritime law’s prohibition against purely economic damages did not limit Settoon’s recovery. Louisiana ex rel. Guste v. M/V TESTBANK, 752 F.2d 1019, 1022 (5th Cir. 1985) (en banc). Marquette appealed.

The 5th Circuit based its decision on statutory construction. After the Responsible Party pays compensation, it may seek partial or complete repayment under OPA from others by means of contribution or subrogation. 33 U.S.C.S. § 2709 (contribution); § 2715 (subrogation). Section 2709 specifically provides that a contribution claim may be brought “under this Act….” Therefore, a statutory claim for contribution exists under OPA, unencumbered by the general maritime law’s preclusion against economic damages without physical injury from the TESTBANK case.

Marquette argued that allowing contribution would turn on its head Congress’s intent in OPA to hold the vessel owner liable unless a third party was “solely liable.” The court disagreed, reasoning that is a defense to overall OPA liability. There would be no purpose for OPA to contain § 2709 devoted to contribution if it was limited to recovery only from a "solely liable" third party.

The 5th Circuit brushed back Marquette’s reliance on a case from the Northern District of Illinois that did not delve into the details of OPA’s contribution provision, and the panel disagreed with that court’s reasoning in any event. A second district court case from the Eastern District of Virginia presented by Marquette was also rejected because the Responsible Party in that case was forced to rely on general maritime law because it was precluded from OPA-based recovery due to a contract with the alleged third-party tortfeasor.

As vessel owner and Responsible Party, Settoon must immediately turn to the cleanup without concerning itself with ultimate financial responsibility. But once that is done, the 5th Circuit holds that a Responsible Party may through contribution or subrogation seek payment from all others who were partially or completely at fault. And a claim for contribution under OPA’s contribution provision may be brought under the statute, independent from general maritime law and its prohibition against recovery of purely economic damages.
 
Settoon may recover from Marquette 65% of damages it paid to claimants, including those arising out of purely economic losses.

Settoon Towing, L.L.C. v. Marquette Transp. Co., L.L.C. (in re Complaint of Settoon Towing, L.L.C.), No. 16-30459, 2017 U.S. App. LEXIS 10388 (5th Cir. 2017).

 


by Matthew H. Ammerman on June 24th, 2017

Miracle Max from The Princess Bride declares that a person can be mostly dead or all dead. The former can be revived, the only thing you can do with the latter is go through their pockets to look for loose change.

The Helix 534 was a former drill ship undergoing conversion to a well-intervention ship in Singapore. During that overhaul she was “mostly dead.” Regardless, the Texas Supreme Court holds she was not a vessel-in-navigation supportive of seaman status.

Helix hired Kelvin Gold as an “able-bodied seaman,” anticipating that he would work offshore on the rig on well intervention. Prior to her launch, however, Gold was to familiarize himself with the vessel,  and he worked on the conversion including painting and cleaning. Gold reported injuries in December 2012 and April 2013 while the 534 was worked on in Singapore and her engines were inoperable.

A seaman must contribute to the mission of and have substantial connection to a vessel. No vessel, no seaman. Congress defined "vessel" to mean "every description of water-craft or other artificial contrivance used, or capable of being used, as a means of transportation on water." 1 U.S.C. § 3 In 2005, the U.S. Supreme Court added the judicial gloss that a structure must be “practically capable” of transportation on water to qualify as a vessel. Stewart v. Dutra Constr. Co., 543 U.S. 481, 497, 125 S. Ct. 1118, 1129 (2005).

Justice Thomas in Stewart states that the in-navigation requirement does not stand separate from the vessel requirement. And it is clear that a vessel "does not cease to be a vessel when she is not voyaging, but is at anchor, berthed, or at dockside[,]" or under repair. Chandris v. Latsis, 515 U.S. 347, 373 (1995).

Here, however, the more specific question was whether the extent of the 534’s overhaul was sufficient to render her not “practically capable” of transportation over water. The Supreme Court in Chandris states that the "prevailing view is that 'major renovations can take a ship out of navigation, even though its use before and after the work will be the same.' " Id. at 374. And longstanding U.S. Supreme Court precedent holds that a ship under a complete overhaul is not a vessel supportive of seaman status. West v. United States, 361 U.S. 118, 122, 80 S. Ct. 189, 192 (1959)(mothballed vessel undergoing complete overhaul to be placed in service was not a vessel).

It is the character of the work on the vessel that determines whether it is out of navigation, and, consequently, practically incapable. The factors are:

(a) the significance of the work performed;
(b) the cost of conversion relative to the value of the ship;
(c) whether contractors exercised control over the work;
(d) the duration of the repairs; and
(e) whether the repairs took the ship out of service.

The work on the 534 was significant in that she was being converted from a drill ship to a well-intervention ship. The overhaul cost $115M compared to the $85M purchase price. A majority of the work in Singapore was controlled by contractors over 20 months. And the 534 was out-of-service, i.e., not working, during the conversion. The dissent wanted to remand for more evidence on the extent of her capability to navigate before, in between, and after Gold’s injuries. But the supreme court’s 5-4 majority focused on the fact that “…the 534 remained stagnant—incapable of self-transit—throughout the entire time Gold claims Jones Act coverage.” The 534 was “mostly dead.” And that was enough. Therefore, Gold was not a seaman as a matter of law.

Helix Energy Sols. Grp., Inc. v. Gold, 2017 Tex. LEXIS 561 (June 16, 2017).



by Matthew H. Ammerman on May 28th, 2017

You take your plaintiff as you find him. That is a general principle of tort law. The common example is a person with an eggshell skull who is in an accident and suffers brain damage, whereas you and I would only suffer a headache. The liable tortfeasor is responsible for all damages from the accident.

Here, that principle was applied to Ricky Koch, 54, a foreman for Economy Iron Works who fell backwards on a stairwell on the public vessel S/S Altair on February 2, 2012, during a pre-bid inspection. Koch sued the U.S. government for vessel negligence through Section 905(b) of the LHWCA, claiming neck, arm, and knee injuries that necessitated a cervical fusion and one total knee replacement. At least 3 additional knee surgeries and a posterior cervical fusion revision were planned. U.S. District Court Judge Susie Morgan of the Eastern District of Louisiana awarded $2.83M after a bench trial, including pain and suffering of $1.3M. The federal government appealed.

Prior to his fall, Koch needed total knee replacements, had been diagnosed with carpal tunnel syndrome, and had cervical fusion surgery in 2008. In January 2012 -- less than a month prior to the fall - rheumatologist Merlin Wilson, M.D., told Koch that he needed a total knee replacement "in the worse way."

The federal government argued that Koch's damages were not due to the fall. Its orthopedic surgeon reviewed reports of the MRI films and saw no changes before and after the accident.

The Fifth Circuit recounts the eggshell-skull rule included in the Restatement (Third) of Torts and points out two exceptions: (1) if a person is disabled or incapacitated prior to an accident, the defendant is only liable for the additional harm or aggravation he caused; and, (2) when a plaintiff has a preexisting condition that would inevitably worsen, damages should be reduced to what would have been suffered even in the absence of the subsequent injury, but the burden of proof in such cases is upon the defendant to prove the extent of the damages that the preexisting condition would inevitably have caused.

As to the first exception, the Fifth Circuit held it did not apply because there was not evidence that Koch was disabled prior to his fall. Koch, his wife, and a supervisor testified that Koch had been working and expected that he would continue. The second exception is not discussed. A key part to that exception is that the defendant has the burden of proof to show what plaintiff would have suffered even if he had not fallen. For example, testimony from doctors as to pain, suffering, and surgery that would have happened regardless of the fall, as well as a presumed shortened industrial work life due to serious preexisting orthopedic conditions. There is no indication the government presented evidence of that and instead sought to show that none of the damages were due to the fall. The Fifth Circuit, applying the clear-error standard to the district court's reliance on Koch's treating physicians, rejected that argument.

The government also argued the trial court applied the wrong standard, making the unusual argument that the eggshell-skull rule only applies in cases where the preexisting condition is latent. The Fifth Circuit said there was no legal support for that limitation, and the panel also rejected the government's argument that Judge Morgan abused her discretion for failing to allow an additional expert opinion developed after the report deadline. The government made no proffer of that evidence. The $2.83M judgment was affirmed in all respects.

Koch v. United States, 2017 U.S. App. LEXIS 8486 (5th Cir. May 12, 2017).






by Matthew H. Ammerman on May 15th, 2017

In Texas, medical expenses are often proven up by affidavits signed a medical records clerk stating the amount charged was reasonable and necessary. Tex. Civ. Prac. & Rem. Code § 18.001. But amounts that are written off due, for example, to workers' compensation schedules are not recoverable or admissible. Tex. Civ. Prac. & Rem. Code § 41.0105; Haygood v. De Escabedo, 356 S.W.3d 390, 399 (Tex. 2011).

The 5th Circuit delved into this issue in 2012 in the Manderson case that involved the employer's general maritime law's duty of medical cure to a seaman. There, the 5th Circuit held that only the lower amounts accepted by the medical providers -- not retail charges -- could be awarded to the injured seaman. Manderson v. Chet Morrison Contrs., Inc., 666 F.3d 373, 382 (5th Cir. 2012)This is relevant to damages because the amount of medical costs paid is often a metric used by the injured worker to support compensatory damage awards for, for example, pain and suffering.

Here, Robert dePerrodil, 70, an oilfield consultant, sued third-party vessel owner Bozovic Marine, Ltd. for negligence in operating a vessel and failing to advise him to go back to his seat when seas got rough. DePerrodil fell and injured his back, and his immune employer, PEI, paid his medical expenses under the Longshore & Harbor Workers' Compensation Act. DePerrodil incurred charges for medical treatment of $186,080.30. But the medical providers accepted $57,385.50 in payment of those medical bills. In a bench trial, the judge found Bozovic liable and awarded the full amount of billed charges. Bozovic appealed, and the 5th Circuit held the collateral source rule applied, and Bozovic Marine was liable for medical expenses paid by PEI's LHWCA insurer. But it reversed the trial court's medical expense award because dePerrodil may not be awarded medical costs that were billed but not paid. The judgment was affirmed except for the award of medical expenses.

Therefore, the actually-paid-or-incurred limitation applies under general maritime law  -- not just in the cure context.

The 5th Circuit also affirmed the trial court's reliance on a higher-than-average work life expectancy argued for by dePerrodil because it was supported by evidence. The appellate panel distinguished other 5th Circuit cases in which the fact finder's deviation from average work life was based solely on the worker's argument that he intended to continue working. Cf. Barto v. Shore Constr., L.L.C., 801 F.3d 465 (5th Cir. 2015). Here, dePerrodil's vocational expert relied on his work history, etc. in presenting evidence that he would likely work until age 75. The trial court relied on that evidence, and the 5th Circuit found that was not clear error.

Deperrodil v. Bozovic Marine, Inc., 842 F.3d 352, 356 (5th Cir. 2016).


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