BRB No. 93-1334
KATHLEEN HENDERSON )
(Widow of EARL HENDERSON) )
)
Claimant-Respondent )
)
v. )
)
INGALLS SHIPBUILDING, ) DATE ISSUED: 09/12/1996
INCORPORATED )
)
and )
)
MISSISSIPPI INSURANCE )
GUARANTY ASSOCIATION )
)
Employer/Carrier- )
Petitioners ) DECISION and ORDER
Appeal of the Decision and Order of C. Richard Avery, Administrative Law
Judge, United States Department of Labor.
Steven J. Miller, Pascagoula, Mississippi, for claimant.
Paul B. Howell (Franke, Rainey & Salloum), Gulfport, Mississippi, for
employer/carrier.
Before: SMITH, BROWN and DOLDER, Administrative Appeals Judges.
PER CURIAM:
Employer appeals the Decision and Order (92-LHC-2118) of Administrative Law
Judge C. Richard Avery rendered on a claim filed pursuant to the provisions of the
Longshore and Harbor Workers' Compensation Act, as amended, 33 U.S.C. §901
et seq. (the Act). We must affirm the findings of fact and conclusions of
law of the administrative law judge if they are rational, supported by substantial
evidence, and in accordance with law. O'Keeffe v. Smith, Hinchman & Grylls
Associates, Inc., 380 U.S. 359 (1965); 33 U.S.C. §921(b)(3).
Earl Henderson (decedent) worked for employer in the 1940's, during which time
he was exposed to asbestos. In 1981, decedent was diagnosed with malignant
mesothelioma; thereafter, on February 24, 1982, decedent filed a claim under the
Act.[1] Prior to his death, decedent and his
spouse Kathleen Henderson (claimant) filed a third-party action against various
asbestos manufacturers. Before the instant claim for benefits under the Act
proceeded to a formal hearing before the administrative law judge, decedent and
claimant entered into settlements with six of the defendants named in their third-party action for a total net amount of $38,036.93. In each of the six third-party
settlements, decedent and claimant executed releases discharging the defendant from
any further claim by either decedent or claimant.
In a Decision and Order filed on November 20, 1985, Administrative Law Judge
Ben H. Walley awarded decedent disability benefits under the Act based on an
agreement reached by the parties. Judge Walley ordered employer to pay a lump sum
of $16,000 to decedent in satisfaction of all benefits accrued prior to September
26, 1985, noting employer's agreement not to assert a lien on any of the past
third-party recoveries or the Mississippi workers' compensation payments to reduce
this lump sum payment. Judge Walley further ordered employer to pay compensation
for permanent total disability commencing September 21, 1985, at a weekly
compensation rate of $308.49, less a credit of $112 for the Mississippi workers'
compensation benefits, and to provide Section 7, 33 U.S.C. §907, medical
benefits to decedent.
Decedent died of mesothelioma on January 22, 1986, and claimant filed a claim
for death benefits under the Act; a compensation order was entered on March 12,
1987, awarding death benefits at a weekly compensation rate of $231.60, less the
$112 received under the Mississippi statute.[2]
On April 24, 1987, claimant amended the third-party complaint against the asbestos
manufacturers to make it a claim for wrongful death brought by her and her four
adult, non-dependent children. On August 28, 1989, claimant, on her own behalf and
through a power of attorney on behalf of her four children, entered into a third-party settlement with the Wellington Group for a gross amount of $210,000. The
Wellington release provides that any employer ordered to pay workers' compensation
benefits to the releasers shall first be given credit for the consideration paid
to the releasers. The United States District Court judgment approving the
Wellington settlement also contains such a provision. After the attorney's fee and
expenses and reimbursement of disability and widow's benefits paid under the Act
by the carrier were subtracted from the gross proceeds, each of the adult children
received $16,612.55, while claimant received no proceeds. Claimant submitted to
employer an LS-33 Form requesting approval of the Wellington settlement, noting
that the gross amount of the settlement was $210,000 and the net amount was "gross
amount minus attorney's fees and expenses." Employer stopped paying claimant death
benefits under the Act in September 1989. Claimant also entered into a third-party
settlement with the Johns-Manville Trust, again on behalf of herself and her four
children, for a gross amount of $200,000. The Johns-Manville release contains a
provision regarding a credit for workers' compensation similar to that contained
in the Wellington release. After deductions for the attorney's fee and expenses
and reimbursement to the carrier for claimant's death benefits from the gross
proceeds, claimant received $13,263.86, and each of her children received
$23,900.[3] In November 1989, the deputy
commissioner indicated that no further benefits were due until the third-party
recovery was absorbed; claimant sought reinstatement of benefits in February 1991,
and the case was referred to the Office of Administrative Law Judges for a formal
hearing for resolution of the amount of the credit to which employer is entitled
under Section 33(f).
In his Decision and Order, the administrative law judge first determined that,
pursuant to the language of Section 33(f), 33 U.S.C. §933(f), employer is not
entitled to a credit for amounts received from the two post-death third-party
settlements by claimant's four adult children. Next, the administrative law judge
rejected employer's argument that the two post-death settlement releases provide
a contractual basis for employer to credit the adult children's net proceeds,
finding that the contractual language provides that employer is entitled to credit
the settlement proceeds of only those parties having a successful longshore claim.
The administrative law judge further rejected employer's contention that it was
misled by the information furnished in claimant's LS-33 forms, noting there is no
evidence of detrimental reliance. Lastly, the administrative law judge ruled that
employer is not entitled to a credit against its present compensation liability to
claimant for the six pre-death third-party settlements inasmuch as employer failed
to make a showing regarding apportionment of those settlements. The administrative
law judge thus determined that employer was entitled to receive a credit pursuant
to Section 33(f) for the net amount received by claimant alone from two post-death
settlements.
On appeal, employer first contends, with respect to the post-death
settlements, that the administrative law judge erred in finding that Section 33(f)
does not allow employer to offset its liability for death benefits by amounts
received by claimant's children, the non-dependent heirs at law. Employer further
contends that the administrative law judge erred in not recognizing a contractual
basis for allowing employer to credit the amounts received by the adult children
and in not finding claimant estopped from objecting to allowing employer a credit
for all net third-party recoveries based upon the representations contained in the
LS-33 Forms. Finally, employer assigns error to the administrative law judge's
failure to allow employer to offset its liability for death benefits by the amount
of unused net third- party recoveries received by decedent and claimant prior to
decedent's death. Claimant responds, urging affirmance of the administrative law
judge's Decision and Order.[4]
I. Post-Death Settlements
We first address employer's contention that the administrative law judge's
determination that Section 33(f) does not allow employer to credit amounts received
by claimant's non-dependent children from the post-death third-party settlements
against its liability for claimant's death benefits is contrary to the specific
language of that statutory provision.[5]
Subsequent to the filing of briefs in the instant case, the United States Court of
Appeals for the Fifth Circuit, under whose appellate jurisdiction this case arises,
issued its decision in Ingalls Shipbuilding, Inc. v. Director, OWCP [Yates],
65 F.3d 460, 29 BRBS 113 (CRT) (5th Cir. 1995), pet. for cert. granted, 64
U.S.L.W. 3762 (U.S. 1996)(No. 95-1081). Addressing the precise argument advanced
by employer in the instant case, the court held that, pursuant to the plain
language of Section 33(f), the employer is entitled to credit only the net amount
received from post-death third-party settlements by the widow, and not the net
amounts received by the non-dependent children. Accord Force v. Director,
OWCP, 938 F.2d 981, 25 BRBS 13 (CRT)(9th Cir. 1991); see also I.T.O.
Corp. of Baltimore v. Sellman, 967 F.2d 971, 26 BRBS 7 (CRT) (4th Cir. 1992),
cert. denied, ___ U.S. ___, 113 S.Ct. 1579 (1993). Therefore, pursuant to
the court's holding in Yates, we reject the construction of Section 33(f)
urged by employer.
We further reject employer's alternative arguments that apportionment of the
third- party recovery should be allowed only where the settlement order and/or
releases specify the amounts recovered by each party, and that claimant bears the
burden of proof to establish apportionment. The administrative law judge in the
instant case found that the post-death settlements were apportioned among claimant
and her four children in accordance with the State of Mississippi's wrongful death
statute. We note that the third-party settlements at issue in Yates were
apportioned among the widow and her non-dependent children on the basis of the same
Mississippi statute. See Yates, 65 F.3d at 462, 29 BRBS at 114 (CRT).
Moreover, contrary to employer's averment that claimant bears the burden of
establishing apportionment of the third-party recoveries, the courts that have
addressed the question of the burden of proof of apportionment have uniformly held
that the employer bears the burden of proof regarding apportionment of third-party
settlements. See Force, 938 F.2d at 985, 25 BRBS at 19-20 (CRT);
Sellman, 967 F.2d at 973, 26 BRBS at 9 (CRT); Jones v. U.S. Steel
Corp., 25 BRBS 355, 361 (1992).
Employer's next argument, that provisions contained in the post-death
settlement releases provide a contractual basis for allowing employer to offset the
net amount of the recoveries of both claimant and the non-dependent children, is
also controlled by the decision of the Fifth Circuit in Yates, wherein the
court rejected the precise argument advanced by employer in the instant case.
Construing contractual language virtually identical to that found in the two post-death settlement releases in the case at bar, the court held, first, that the
release provisions do not clearly indicate an intent to grant employer a credit
against any larger portion of the settlement amount than would be subject to a
compensation lien, and, second, that a compensation lien would be imposed on only
the settlement proceeds received by the widow inasmuch as she was the only party
to the settlement who was entitled to compensation. Yates, 65 F.3d at 466-67, 29 BRBS at 117-118 (CRT). Thus, for the reasons stated in Yates, we
reject employer's contention of error.
Next, we reject employer's contention that the administrative law judge
erroneously declined to find that claimant is estopped from contesting employer's
entitlement to an offset for amounts recovered by her non-dependent children from
the post-death third-party settlements based upon representations in the LS-33
Forms filed by claimant. See generally Rambo v. Director, OWCP, 81 F.3d 840,
30 BRBS 27 (CRT)(9th Cir. 1996). Based on our review of the record, we affirm the
administrative law judge's finding that there is no evidence to support employer's
assertion that it relied solely on the information supplied by claimant in the LS-33 Forms in electing to approve the third-party settlements. As noted by the
administrative law judge, the LS-33 Forms reflect accurate dollar amounts for the
gross amounts of the third-party settlements. Moreover, we note the absence of
record evidence that might establish that employer was ignorant of the full
contents of the post-death third-party settlements, including the adult children's
inclusion as plaintiffs and the apportionment of the settlement proceeds, that
employer relied solely on the information supplied by claimant in the LS-33 Forms, and that claimant intended that employer
approve the settlements based solely on the information claimant provided in the
LS-33 Forms. We conclude, therefore, that employer has not established the
necessary elements for application of the estoppel doctrine. See generally
Rambo, 81 F.3d at 840, 30 BRBS at 27 (CRT).
Accordingly, the administrative law judge's finding that employer is not
entitled to an offset for amounts received by claimant's non-dependent children is
affirmed.
II. Pre-Death Settlements
Lastly, we address employer's contention that the administrative law judge
erred in not allowing employer a credit against claimant's death benefits under the
Act for the third- party settlements entered into by decedent and claimant prior
to decedent's death. This issue is also controlled by the Fifth Circuit's holding
in Yates that the claimant in that case was not "a person entitled to
compensation" under Section 33 at the time of the pre-death settlements because her
right to death benefits did not vest until her husband's death. Yates, 65
F.2d at 464, 29 BRBS at 116 (CRT). We therefore hold, consistent with the Fifth
Circuit's decision in Yates, that at the time of the pre-death settlements
claimant was not "a person entitled to compensation" for purposes of Section 33(f).
Because, at the time of the pre-death settlements, claimant did not fall within the
definition of "a person entitled to compensation," the provisions of Section 33(f)
may not be applied to provide employer with an offset against claimant's death
benefits for the pre-death settlement recoveries. In light of our holding that
this issue is controlled by the Fifth Circuit's construction of the term "a person
entitled to compensation" in Yates, we need not consider the administrative
law judge's findings nor the parties' contentions regarding the issue of the
apportionment of the pre-death recoveries between decedent and claimant. Thus, we
affirm the administrative law judge's determination that employer is not entitled
to an offset for the pre-death third-party settlements.
Accordingly, the Decision and Order of the administrative law judge is
affirmed.
SO ORDERED.
ROY P. SMITH
Administrative Appeals Judge
JAMES F. BROWN
Administrative Appeals Judge
NANCY S. DOLDER
Administrative Appeals Judge
To Top of Document
Footnotes.
1)Decedent also filed a claim for permanent total disability
benefits against International Paper Company under the Mississippi Workers'
Compensation Act, and, on October 4, 1982, he was awarded Mississippi workers'
compensation in the amount of $112 per week, beginning October 15, 1981, and
continuing for a period not to exceed 450 weeks.
Back to Text
2)Although claimant did not receive Mississippi workers'
compensation widow's benefits, she did receive the state workers' compensation
disability benefits awarded to decedent for the duration of the 450-week period
they were awarded, a period which ended on July 9, 1990. Employer credited these
payments against claimant's death benefits under the Act.
Back to Text
3)Employer's attorney stated at the hearing that it had been
reimbursed in full for all disability and death benefits previously paid under the
Act out of the proceeds of the Wellington and Johns-Manville settlements.
Back to Text
4)We hereby deny employer's Motion to Strike Claimant's Response
Brief to Employer/Carrier's Reply Brief. 20 C.F.R. §802.219. Additionally,
we note that employer's request to maintain this appeal before the Board for a
period of 60 days beyond September 12, 1996, is rendered moot by our disposition
of this case.
Back to Text
5)Amended Section 33(f) provides:
If the person entitled to compensation institutes proceedings
within the period prescribed in subsection (b) of this section
the employer shall be required to pay as compensation under
this chapter a sum equal to the excess of the amount which the
Secretary determines is payable on account of such injury or
death over the net amount recovered against such third person.
Such net amount shall be equal to the actual amount recovered
less the expenses reasonably incurred by such person in
respect to such proceedings (including reasonable attorney
fees).
33 U.S.C. §933(f)(1988).
Back to Text
NOTE: This is a PUBLISHED LHCA Document.
To Top of Document
|
