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DISCLAIMER: The Longshore Benchbook was created solely to assist the Office of Administrative Law Judges as a first reference in researching cases arising under the Longshore and Harbor Workers' Compensation Act, and extension acts, as amended. This Benchbook does not constitute the official opinion of the Department of Labor, the Office of Administrative Law Judges, or any individual judge on any subject. This Benchbook does not necessarily contain an exhaustive or current treatment of case holdings, and should, under no circumstances, substitute for a party's own research into the statutory, regulatory, and case law authorities on any given subject referred to therein. It is intended to be used as a research tool, not as final legal authority and should not be cited or relied upon as such.
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TOPIC 33
Topic 33
Generally
[ED. NOTE: The following federal district
court cases are included for informational purposes only.]
Ayers v. C&D General Contractors, 2002 WL
31761235, 237 F. Supp 2d 764 (W.D. Ky. Dec. 6, 2002).
Here the widow of a worker killed while removing supports from a dock settled the
LHWCA claim but subsequently filed third party actions under the general
maritime law and the Admiralty Extension Act. At issue in the third party
action was whether "water craft exclusion" excluded this claim since
the worker had been working underneath a barge. The court concluded that the
claim should not be excluded since the barge was not used for transportation
but merely aided the work under the dock.
Topic 33.2 Compensation for
Injuries Where Third Persons Are Liable--Assignment of Rights
Mabile v. Swiftships, Inc., 38 BRBS 19 (2004).
The Board affirmed the ALJ's finding that Section 33(g) does not bar a widow's
claim for death benefits although she entered into a third-party settlement
after the death of her husband where she was only settling the decedent's tort
action for his pain and suffering and economic loss, which remained pending at
the time of his death. The Louisiana court had dismissed all of the claims that
the widow filed in her own right, specifically holding that only the claims for
the decedent's lost wages and pain and suffering could go forward. Thus, the
widow obtained the proceeds of the third-party settlement with the employer's
officers only because she was substituted for her husband as a representative
of his estate and not because she surrendered any of her own rights. Therefore
she was not a "person entitled to compensation" for the decedent's
pain and economic loss.
The Board explained that in this case, although the decedent's disability claim
and the widow's death benefits are based on the same occupational exposure,
they are separate claims for distinct types of benefits. As the widow's claim
is for death benefits under the LHWCA, and the settlement is solely based on
the decedent's lost wages and pain and suffering during his life, the third
party was not liable for the same disability or death for which the widow
sought benefits under the LHWCA. "Where, as here, the claimant does not
have the right to seek damages from the third party for her own benefits, then
employer does not have the right, under Section 33(b), to seek damages on the
death claim from that third party."
Topic 33.6 Employer Credit
For Net Recovery By "Person Entitled To Compensation"
New Orleans v. Ibos, ___ U.S. ___, 124 S.Ct.
1038 (Mem.)(Cert. denied January 12, 2004). [See next
entry.]
Here the U.S. Supreme Court declined to consider this Cardillo
rule related case. The Fifth Circuit had previously held that the
amounts that a widow received from LHWCA settlements with longshore employers
who were not the last responsible employer were not relevant to the amount owed
by the last responsible maritime employer and should not have reduced liability
for the last responsible maritime employer. Thus, the Fifth Circuit’s
opinion stands.
Topic 33.6 Employer Credit
For Net Recovery By "Person Entitled To Compensation"
New Orleans Stevedores v. Ibos, 317 F.3d 480 (5th
Cir. 2003). [See Above.]
In this matter, where the worker had mesothelioma, the Fifth Circuit
followed the Second Circuit's rule annunciated in Travelers Ins. Co.
v. Cardillo, 225 F.2d 137 (2d Cir. 1955) that liability under
Section 2(2) of the LHWCA rests with the last maritime employer regardless of
the absence of actual causal contribution by the final exposure. Employer in
the instant case had argued that it could not be liable because of the worker's
mesothelioma and that disease's latency period. However, in following Cardillo,
the Fifth Circuit found that a link between exposure while working for
the last employer and the development of the disabling condition was not
necessary.
The Fifth Circuit has previously held that, after it is determined that
an employee has made a prima facie case of entitlement to benefits under the
LHWCA, the burden shifts to the employer to prove either (1) that exposure to
injurious stimuli did not cause the employee's occupational disease, or (2)
that the employee was performing work covered under the LHWCA for a subsequent
employer when he was exposed to injurious stimuli. Avondale Indus., Inc. v.
Director, OWCP [Cuevas], 977 F.2d 186, 190 (5th Cir. 1992).
The Fifth Circuit also ruled that the employer was not entitled to a
credit for the claimant's settlement receipts from prior maritime employers.
Judge Edith Jones issued a vigorous dissent on this issue.
Topic 33.6.1 Compensation For Injuries Where Third Persons Are Liable--“Person Entitled to Compensation” Pursuant to Section 33(f)
Richardson v. Newport News Shipbuilding & Dry Dock Co.,
38 BRBS 6(2004).
There are two significant issues in this matter, both involving Section
33. First, at issue is whether Section 33(g) can bar a claim for COPD
disability when a claimant suffers from both a non-asbestos related COPD
condition, plus an asbestos related condition and the claimant accepted third
party settlements in relation to his asbestos related lung disease.
Second, at issue is the classification of a claimant who is only undergoing
medical monitoring (as opposed to receiving benefits/compensation) when it
comes to whether that person is a “person entitled to compensation.”
While this case was ultimately remanded, it is nevertheless significant for its
illustration of the Board’s views.
The claimant originally alleged that he contacted an asbestos-related lung
disease as a result of exposure to asbestos dust and fibers, and chronic
obstructive pulmonary disease (COPD) from exposure to welding smoke and paint
fumes, during the course of his approximately 30 years of work for the
employer. The claimant had filed a claim for asbestosis in 1995 and for
COPD in 1999, which were eventually consolidated. At the OALJ hearing,
the claimant averred that he did not presently have asbestosis and thus he
sought to amend his asbestos claim to seek only an award for medical monitoring
under Section 7 of the LHWCA. While his longshore claims were pending,
the claimant became involved in third party litigation and entered into two
third party settlements. The employer argued that Section 33(g) should
apply and bar the claimant’s recovery since he had entered into the settlements
without the employer’s prior written approval.
The Board first addressed the issue of whether a claimant recovering only medical
monitoring for an asbestos-related condition is a “person entitled to
compensation.” In resolving this issue, the Board found that the ALJ
rationally looked to the evidence in existence as of the date of the
settlements in order to determine if the claimant satisfied the prerequisites
to the right to recover. The evidence at that point in time supported the
ALJ’s finding that as of the date the claimant stopped working, the claimant
was aware of the relationship between his work-related asbestosis and his
inability to work. At that point in time, there was medical evidence
noting the existence of a condition “consistent with asbestos.”
The claimant withdrew his claim for disability benefits for asbestosis,
ostensibly on the ground that the later medical evidence could not support a
finding of either asbestosis or disability due to asbestosis.
Nonetheless, the Board noted that the ALJ addressed the medical evidence as a
whole and concluded that the claimant had asbestosis, asbestos-related pleural
plaques, and both a restrictive and an obstructive lung impairment due to
simultaneous work exposure to asbestos, smoke, dust, and welding fumes, and
which combined with the claimant’s pre-existing asthma to render him totally
disabled. Further more, the Board noted that the ALJ concluded that the
claimant’s disability due to his lung condition was the same disability for
which he settled his third party claims and therefore fond the disability claim
under the LHWCA barred, because of the third party settlements.
The Board explained that it could not affirm this finding. The Board
remanded with instructions to make findings consistent with Chavez v.
Director, OWCP, 961 F.2d 1409, 25 BRBS 134 (CRT) (9th Cir.
1992) (Claimant developed asbestosis and hypertension. Ninth Circuit:
An employee who is totally disabled based on either injury alone could recover
from the employer under either injury. Therefore to allow an employer
set-off for third party proceeds received under one injury would result in a
windfall for the employer because the employee could have sought recovery under
the other injury for which no third party proceeds are awardable. Such an
interpretation in effect would reward the employer for causing two work-related
disabilities instead of one.); on remand, Charvez v. Todd Shipyards
Corp., 27 BRBS 80 (1993) (McGranery, J., dissenting), aff’d on recon.
En banc, 28 BRBS 185 (1994) (Brown and McGranery, J.J. dissenting), aff’d
sub nom. Todd Shipyards Corp. v. Director, OWCP, 139 F. 3d 1309, 32
BRBS 67 (CRT) (9th Cir. 1998).
The Board further instructed the ALJ to then determine the applicability of
Section 33(g) based on these findings. “Only if asbestosis is claimant’s
only work-related disability can Section 33(g) be invoked to bar claimant’s
claim.” The Board further noted that, “Although claimant withdrew his
claim for disability benefits due to asbestosis, employer nevertheless may
attempt to establish, in support of its claim, that Section 33(g) applies, that
claimant’s disability is due to asbestosis alone.”
The Board went on to state, “If after reviewing the medical evidence in light
of Chavez, the [ALJ] again finds that claimant is disabled by both
asbestosis and COPD, Section 33(g) cannot bar the claim because, under the
aggravation rule, COPD is considered to be the disabling, compensable condition
and therefore not the same disability for which claimant settled his third
party claims.” Thus, the Board vacated the ALJ’s finding that Section
33(g) bars the claimant’s COPD and remanded the case for consideration of the
entire record to discern the cause of the claimant’s disability.
The Board also found that, under the circumstances, the claimant’s claim for
medical monitoring for any asbestos-related condition cannot be barred by
Section 33(g) because, ultimately, the claimant is not entitled to disability
compensation for asbestosis; a person entitled only to medical benefits is not
a “person entitled to compensation” for purposes of Section 33(g).
Topic 33.7 Compensation for Injuries Where Third Persons are Liable--Ensuring Employer’s Rights—Written Approval of Settlement
Marmillion v. A,M.E. Temporary Services,
(Unpublished)(BRB No. 04-0272)(Dec. 13, 2004).
This is a Section 33(g) case wherein the claimant alleges on appeal that the
strict guidelines of Section 33(g) should not bar his claim. Claimant
worked for a temporary service company who had contracted his services to a
company that loaded and unloaded grain barges. Following an injury,
claimant’s immediate employer paid some benefits and a LHWCA claim was
filed. Subsequently benefits ceased and employer’s counsel informed
claimant’s counsel that the carrier had gone out of business and that the
employer did not have reserves in place to make further payments to the
claimant: “I wish I could be of more help, but I am afraid that your clients
have little recourse of recovery, particularly if they are asserting maritime
claims which are not covered by the Louisiana Insurance Guaranty Association
statute.”
Subsequently claimant filed a Jones Act, general maritime law action and 905(b)
action. Included as a defendant was the owner of a tug who had chartered
the tug to the employer and barge loading company for use in maneuvering grain
barges. The tug company settled for $1,500. The maritime suit
resulted in a dismissal of claimant’s case. Prior to the settlement
against the tug company, claimant’s attorney and employer’s attorney had
discussed settling the LHWCA matter. Claimant contends that at some point
he was notified that there was still LHWCA insurance coverage for this claim.
The ALJ dismissed the claim on Section 33(g) grounds. The Board has now
remanded the matter stating that the ALJ must first explicitly determine
whether the tug company was potentially liable to both the claimant and the
employer for the injury in accordance with Section 33(a). The Board noted
that the employer bears the burden of producing evidence on this issue as
Section 33(g) is an affirmative defense.
The Board rejected the claimant’s specific contention that the employer’s
alleged “bad faith” in advising him that the carrier was out of business and
that the employer could not pay compensation due to a lack of reserves should
preclude the employer’s reliance on Section 33(g). Additionally the Board
noted that the doctrine of equitable estoppel did not apply. This doctrine
prevents one party from taking a position inconsistent with that which it took
in an earlier action such that the other party would be at a
disadvantage. It typically holds a person to a representation made, or a
position assumed, where it would be inequitable to another, who has in good
faith relied upon that representation or position. To apply this doctrine
to claims under the LHWCA, the Board noted that four elements are necessary:
(1) the party to be estopped must know the facts; (2) he must intend that his
conduct shall be acted on or must act so that the party asserting the estoppel
has a right to believe it is so intended: (3) the latter must be ignorant of
the facts; and (4) he must rely on the former’s conduct to his injury. Rambo
v. Director, OWCP, 81 F.3d 840, 843, 30 BRBS 27, 29(CRT) (9th
Cir. 1996), vacated and remanded on other grounds sub nom. Metropolitan
Stevedore Co. v. Rambo, 521 U.S. 121, 31 BRBS 54(CRT) (1997).
The Board found that although the claimant contended that he filed his lawsuits
in response to his inability to obtain compensation from his employer and/or
carrier, the employer’s correspondence with the claimant was insufficient to
establish that the employer intended that the claimant take this action.
The Board also did not accept the claimant’s contention that it would have been
pointless to attempt to obtain the carrier’s written approval of the settlement
with the tug company because he had been advised that the company was out of
business. The Board noted that when an carrier is out of business, the
employer stands responsible. The Board further noted that even though the
employer’s attorney had stated that the employer did not have the reserves to
pay benefits, at some point after the claimant filed suit against the tug
company, it appears that the claimant was informed that there was insurance
coverage for his claim and the parties discussed a settlement of the LHWCA
claim.
Finally, the Board rejected the claimant’s contention that Section 7(h)
preserves his entitlement to medical benefits that accrued prior to the
settlement with the tug company. See Esposito v. Sea-Land Services,
Inc., 36 BRBS 10 (2002) (§ 7(h) does not preclude the applicability of the
§ 33(g)(1) bar to both compensation and medical benefits.); Wyknenko v. Todd
Pacific Shipyards Corp., 32 BRBS 16 (1998)(Smith, J., dissenting.)(§ 7(h)
does not support a conclusion that this holding is inapplicable to medical
benefits.).
Topic 33.7 Compensation For Injuries Where Third-Persons Are Liable--Ensuring Employer’s Rights—Written Approval of Settlement
Dilts v. Todd Shipyards Corp., (Unpublished)(No.
03-71622)(9th Cir. 7, 2004).
In this case, the shipbuilder’s widow argued that the statutory requirement of
approval contained in Section 33(g) is unconstitutional because it permits an
employer to withhold approval of settlements which forces a claimant to obtain
the benefits of a settlement at the cost of forfeiting the right to
compensation. In its summary affirmation of the widow’s denial, the court
noted that her position was not consistent with the U.S. Supreme Court’s
holding in Estate of Cowart v. Nicklos Drilling Co., 505 U.S.
469, 112 S.Ct. 2589 (1992).
Topic 33.7 Compensation for Injuries Where Third Persons Are Liable—Ensuring Employer's Rights—Written Approval of Settlement
Mapp v. Transocean Offshore USA, Inc., 38 BRBS 43
(2004).
Here the Board held that when obtaining prior written approval of a third-party
settlement under Section 33(g), employer and carrier are separate and distinct
entities and that the separate approval of each is required. In the instant
case, the claimant sued the employer in state court under the Jones Act, as
well as under the general maritime law as a third-party defendant. The claimant
then turned around and sued the employer under the LHWCA. The employer had
different insurance carriers for each claim. The employer, by virtue of its
active participation in the negotiation of the settlement and the fact that it
was an actual signatory to that agreement, received adequate notice and
provided satisfactory approval of the agreement in compliance with Section
33(g)(1). However, the Claimant's claim is barred pursuant to Section 33(g)
because he did not obtain the prior written approval of the carrier.
Additionally, the Board noted that in this particular case, the claimant was
aware that the employer had contracted with separate carriers and that the
claimant was fully aware of his obligations under Section 33(g)(1) and its
accompanying regulations as to the need to obtain approval before executing the
third-party settlement.
Topic 33.7 Ensuring Employer's Rights—Written Approval of Settlement—Qualifying for Benefits (Person Entitled to Compensation)
Mabile v. Swiftships, Inc., 38 BRBS 19 (2004).
The Board affirmed the ALJ's finding that Section 33(g) does not bar a widow's
claim for death benefits although she entered into a third-party settlement
after the death of her husband where she was only settling the decedent's tort
action for his pain and suffering and economic loss, which remained pending at
the time of his death. The Louisiana court had dismissed all of the claims that
the widow filed in her own right, specifically holding that only the claims for
the decedent's lost wages and pain and suffering could go forward. Thus, the
widow obtained the proceeds of the third-party settlement with the employer's
officers only because she was substituted for her husband as a representative
of his estate and not because she surrendered any of her own rights. Therefore
she was not a "person entitled to compensation" for the decedent's
pain and economic loss.
The Board explained that in this case, although the decedent's disability claim
and the widow's death benefits are based on the same occupational exposure,
they are separate claims for distinct types of benefits. As the widow's claim
is for death benefits under the LHWCA, and the settlement is solely based on
the decedent's lost wages and pain and suffering during his life, the third
party was not liable for the same disability or death for which the widow
sought benefits under the LHWCA. "Where, as here, the claimant does not
have the right to seek damages from the third party for her own benefits, then
employer does not have the right, under Section 33(b), to seek damages on the
death claim from that third party."
Topic 33.7 Insuring
Employer’s Rights-Written Approval of Settlement
Richardson v. Newport News Shipbuilding & Dry Dock Co.,
38 BRBS 6 (2004).
There are two significant issues in this matter, both involving Section
33. First, at issue is whether Section 33(g) can bar a claim for COPD
disability when a claimant suffers from both a non-asbestos related COPD
condition, plus an asbestos related condition and the claimant accepted third
party settlements in relation to his asbestos related lung disease.
Second, at issue is the classification of a claimant who is only undergoing
medical monitoring (as opposed to receiving benefits/compensation) when it
comes to whether that person is a “person entitled to compensation.”
While this case was ultimately remanded, it is nevertheless significant for its
illustration of the Board’s views.
The claimant originally alleged that he contacted an asbestos-related lung
disease as a result of exposure to asbestos dust and fibers, and chronic
obstructive pulmonary disease (COPD) from exposure to welding smoke and paint
fumes, during the course of his approximately 30 years of work for the
employer. The claimant had filed a claim for asbestosis in 1995 and for
COPD in 1999, which were eventually consolidated. At the OALJ hearing,
the claimant averred that he did not presently have asbestosis and thus he
sought to amend his asbestos claim to seek only an award for medical monitoring
under Section 7 of the LHWCA. While his longshore claims were pending,
the claimant became involved in third party litigation and entered into two
third party settlements. The employer argued that Section 33(g) should
apply and bar the claimant’s recovery since he had entered into the settlements
without the employer’s prior written approval.
The Board first addressed the issue of whether a claimant recovering only
medical monitoring for an asbestos-related condition is a “person entitled to
compensation.” In resolving this issue, the Board found that the ALJ
rationally looked to the evidence in existence as of the date of the
settlements in order to determine if the claimant satisfied the prerequisites
to the right to recover. The evidence at that point in time supported the
ALJ’s finding that as of the date the claimant stopped working, the claimant
was aware of the relationship between his work-related asbestosis and his
inability to work. At that point in time, there was medical evidence noting
the existence of a condition “consistent with asbestos.”
The claimant withdrew his claim for disability benefits for asbestosis,
ostensibly on the ground that the later medical evidence could not support a
finding of either asbestosis or disability due to asbestosis.
Nonetheless, the Board noted that the ALJ addressed the medical evidence as a
whole and concluded that the claimant had asbestosis, asbestos-related pleural
plaques, and both a restrictive and an obstructive lung impairment due to simultaneous
work exposure to asbestos, smoke, dust, and welding fumes, and which combined
with the claimant’s pre-existing asthma to render him totally disabled.
Further more, the Board noted that the ALJ concluded that the claimant’s
disability due to his lung condition was the same disability for which he
settled his third party claims and therefore fond the disability claim under
the LHWCA barred, because of the third party settlements.
The Board explained that it could not affirm this finding. The Board
remanded with instructions to make findings consistent with Chavez v.
Director, OWCP, 961 F.2d 1409, 25 BRBS 134 (CRT) (9th Cir.
1992) (Claimant developed asbestosis and hypertension. Ninth Circuit:
An employee who is totally disabled based on either injury alone could recover
from the employer under either injury. Therefore to allow an employer
set-off for third party proceeds received under one injury would result in a
windfall for the employer because the employee could have sought recovery under
the other injury for which no third party proceeds are awardable. Such an
interpretation in effect would reward the employer for causing two work-related
disabilities instead of one.); on remand, Charvez v. Todd Shipyards
Corp., 27 BRBS 80 (1993) (McGranery, J., dissenting), aff’d on recon.
En banc, 28 BRBS 185 (1994) (Brown and McGranery, J.J. dissenting), aff’d
sub nom. Todd Shipyards Corp. v. Director, OWCP, 139 F. 3d 1309, 32
BRBS 67 (CRT) (9th Cir. 1998).
The Board further instructed the ALJ to then determine the applicability of
Section 33(g) based on these findings. “Only if asbestosis is claimant’s
only work-related disability can Section 33(g) be invoked to bar claimant’s
claim.” The Board further noted that, “Although claimant withdrew his
claim for disability benefits due to asbestosis, employer nevertheless may
attempt to establish, in support of its claim, that Section 33(g) applies, that
claimant’s disability is due to asbestosis alone.”
The Board went on to state, “If after reviewing the medical evidence in light
of Chavez, the [ALJ] again finds that claimant is disabled by both
asbestosis and COPD, Section 33(g) cannot bar the claim because, under the
aggravation rule, COPD is considered to be the disabling, compensable condition
and therefore not the same disability for which claimant settled his third
party claims.” Thus, the Board vacated the ALJ’s finding that Section
33(g) bars the claimant’s COPD and remanded the case for consideration of the
entire record to discern the cause of the claimant’s disability.
The Board also found that, under the circumstances, the claimant’s claim for
medical monitoring for any asbestos-related condition cannot be barred by
Section 33(g)
because, ultimately, the claimant is not entitled to
disability compensation for asbestosis; a person entitled only to medical
benefits is not a “person entitled to compensation for purposes of Section
33(g).
Topic 33.7 Ensuring
Employer’s Rights–Written Approval of Settlement
Cheramie v. Superior Shipyard and Fabrication, Inc., (Unpublished)
(Civ. A 02-3099)(E.D. La. July 7, 2003).
Here the claimant was injured while working in a ship repair facility. He
settled with the owner of the boat on which he was working and filed a 905
action against his employer. His employer filed a motion for summary judgment
noting that the claimant had not sought the employer’s written permission prior
to entering into the settlement with the boat owner. The claimant alleges that
he was entitled to file the 905 action because his employer failed to secure
LHWCA insurance. In denying the motion for summary judgment, the federal
district judge found that “Section 933(g) is inapplicable because [claimant] is
suing [his employer] for damages, not compensation or benefits under the
LHWCA.” The judge went on to state, “[T]he Court does not consider whether
Plaintiff’s action is permissible under Section 905(a), or whether [the
employer] has failed to secure payment of compensation because the record is
devoid of any reference as to whether [the claimant] has either sought or
received compensation from [the employer].”
Topic 33.7 Third-Party Settlements Ensuring Employer's Rights Written Approval of Settlement
Esposito v. Sea-Land Service, Inc., 36 BRBS 10 (2002).
Here the Board rejected the claimant's assertions that the employer's actions
amounted to a constructive approval of a third-party settlement. The Board
found that the employer's involvement in the third-party litigation and
settlement was insufficient to render Section 33(g)(1) inapplicable. The Board
noted the very limited participation of the employer and found that it was less
than in some other cases where the Board had previously held that Section
33(g)(1) applied. Employer here was a named defendant in the tort suit; thus,
it did not appear in the case on the claimant's side. Second, the employer was
dismissed from the case nearly one and one-half years before the trial and
settlement, and the employer's attorney remained active only for discovery
purposes. The Board further noted that "While there is conflicting
evidence as to whether [employer's attorney] was aware of the settlement
process and the final negotiations, and as to whether he made a congratulatory
comment when informed of the ...settlement, the [ALJ] found that [employer's
attorney] was not involved in the negotiations themselves, and he did not sign
or consent to the general release." The Board found that employer's
participation in the third-party litigation did not rise to the level which
would constitute constructive approval of the settlement and render Section
33(g)(1) inapplicable.
Next the Board addressed an issue of first impression, namely whether Section
33(g)(2) provides claimants with a means for retaining their entitlement to
medical benefits despite having lost their entitlement to compensation.
Referencing Estate of Cowart v. Nicklos Drilling Co., 505 U.S.
469 , 26 BRBS 49 (CRT) (1992); the language of Section 33(g) itself; and the
implementing regulation, 20 C.F.R. § 702.281, the Board concluded that a
claimant must obtain the prior written approval of a settlement for an amount
less than his entitlement under the LHWCA.
Topic 33.7 Ensuring
Employer’s Rights–Written Approval of Settlements
Dilts v. Todd Shipyard Corp., (Unpublished)(BRB No. 02-0434)(March
12, 2003).
The Board found that a claimant can not dodge the Section 33(g) requirement of
written approval from the employer by alleging that the third-party settlements
were de minimis and therefore could not prejudice the employer.
Topic 33.7.3 Involvement of the Employer in
Third-Party Settlements
Marmillion v. A,M.E. Temporary Services,
(Unpublished)(BRB No. 04-0272)(Dec. 13, 2004).
This is a Section 33(g) case wherein the claimant alleges on appeal that the
strict guidelines of 33(g) should not bar his claim. Claimant worked for
a temporary service company who had contracted his services to a company that
loaded and unloaded grain barges. Following an injury, claimant’s
immediate employer paid some benefits and a LHWCA claim was filed.
Subsequently benefits ceased and employer’s counsel informed claimant’s counsel
that the carrier had gone out of business and that the employer did not have
reserves in place to make further payments to the claimant: “I wish I
could be of more help, but I am afraid that your clients have little recourse
of recovery, particularly if they are asserting maritime claims which are not
covered by the Louisiana Insurance Guaranty Association statute.”
Subsequently claimant filed a Jones Act, general maritime law action and 905(b)
action. Included as a defendant was the owner of a tug who had chartered
the tug to the employer and barge loading company for use in maneuvering grain
barges. The tug company settled for $1,500. The maritime suit
resulted in a dismissal of claimant’s case. Prior to the settlement
against the tug company, claimant’s attorney and employer’s attorney had
discussed settling the LHWCA matter. Claimant contends that at some point
he was notified that there was still LHWCA insurance coverage for this claim.
The ALJ dismissed the claim on Section 33(g) grounds. The Board has now
remanded the matter stating that the ALJ must first explicitly determine
whether the tug company was potentially liable to both the claimant and the
employer for the injury in accordance with Section 33(a). The Board noted
that the employer bears the burden of producing evidence on this issue as
Section 33(g) is an affirmative defense.
The Board rejected the claimant’s specific contention that the employer’s
alleged “bad faith” in advising him that the carrier was out of business and
that the employer could not pay compensation due to a lack of reserves should
preclude the employer’s reliance on Section 33(g). Additionally the Board
noted that the doctrine of equitable estoppel did not apply. This doctrine
prevents one party from taking a position inconsistent with that which it took
in an earlier action such that the other party would be at a
disadvantage. It typically holds a person to a representation made, or a
position assumed, where it would be inequitable to another, who has in good
faith relied upon that representation or position. To apply this doctrine
to claims under the LHWCA, the Board noted that four elements are
necessary: (1) the party to be estopped must know the facts; (2) he must
intend that his conduct shall be acted on or must act so that the party asserting
the estoppel has a right to believe it is so intended: (3) the latter must be
ignorant of the facts; and (4) he must rely on the former’s conduct to his
injury. Rambo v. Director, OWCP, 81 F.3d 840, 843, 30 BRBS 27,
29(CRT) (9th Cir. 1996), vacated and remanded on other grounds
sub nom. Metropolitan Stevedore Co. v. Rambo, 521 U.S. 121, 31 BRBS
54(CRT) (1997).
The Board found that although the claimant contended that he filed his lawsuits
in response to his inability to obtain compensation from his employer and/or
carrier, the employer’s correspondence with the claimant was insufficient to
establish that the employer intended that the claimant take this action.
The Board also did not accept the claimant’s contention that it would have been
pointless to attempt to obtain the carrier’s written approval of the settlement
with the tug company because he had been advised that the company was out of
business. The Board noted that when an carrier is out of business, the
employer stands responsible. The Board further noted that even though the
employer’s attorney had stated that the employer did not have the reserves to
pay benefits, at some point after the claimant filed suit against the tug
company, it appears that the claimant was informed that there was insurance
coverage for his claim and the parties discussed a settlement of the LHWCA
claim.
Finally, the Board rejected the claimant’s contention that Section 7(h)
preserves his entitlement to medical benefits that accrued prior to the
settlement with the tug company. See Esposito v. Sea-Land Services,
Inc., 36 BRBS 10 (2002) (§ 7(h) does not preclude the applicability of the
§ 33(g)(1) bar to both compensation and medical benefits.); Wyknenko v. Todd
Pacific Shipyards Corp., 32 BRBS 16 (1998)(Smith, J., dissenting.)(§ 7(h)
does not support a conclusion that this holding is inapplicable to medical
benefits.).
Topic 33.7.3 Involvement of the Employer in
Third-Party Settlements
Mapp v. Transocean Offshore USA, Inc., 38 BRBS 43
(2004).
Here the Board held that when obtaining prior written approval of a third-party
settlement under Section 33(g), employer and carrier are separate and distinct
entities and that the separate approval of each is required. In the instant
case, the claimant sued the employer in state court under the Jones Act, as
well as under the general maritime law as a third-party defendant. The claimant
then turned around and sued the employer under the LHWCA. The employer had
different insurance carriers for each claim. The employer, by virtue of its
active participation in the negotiation of the settlement and the fact that it
was an actual signatory to that agreement, received adequate notice and provided
satisfactory approval of the agreement in compliance with Section 33(g)(1).
However, the Claimant's claim is barred pursuant to Section 33(g) because he
did not obtain the prior written approval of the carrier.
Additionally, the Board noted that in this particular case, the claimant was
aware that the employer had contracted with separate carriers and that the
claimant was fully aware of his obligations under Section 33(g)(1) and its
accompanying regulations as to the need to obtain approval before executing the
third-party settlement.
Topic 33.7.4 Medical Benefits
Marmillion v. A,M.E. Temporary Services,
(Unpublished)(BRB No. 04-0272)(Dec. 13, 2004).
This is a Section 33(g) case wherein the claimant alleges on appeal that the
strict guidelines of Section 33(g) should not bar his claim. Claimant
worked for a temporary service company who had contracted his services to a
company that loaded and unloaded grain barges. Following an injury,
claimant’s immediate employer paid some benefits and a LHWCA claim was
filed. Subsequently benefits ceased and employer’s counsel informed
claimant’s counsel that the carrier had gone out of business and that the employer
did not have reserves in place to make further payments to the claimant:
“I wish I could be of more help, but I am afraid that your clients have little
recourse of recovery, particularly if they are asserting maritime claims which
are not covered by the Louisiana Insurance Guaranty Association statute.”
Subsequently claimant filed a Jones Act, general maritime law action and 905(b)
action. Included as a defendant was the owner of a tug who had chartered
the tug to the employer and barge loading company for use in maneuvering grain
barges. The tug company settled for $1,500. The maritime suit
resulted in a dismissal of claimant’s case. Prior to the settlement
against the tug company, claimant’s attorney and employer’s attorney had discussed
settling the LHWCA matter. Claimant contends that at some point he was
notified that there was still LHWCA insurance coverage for this claim.
The ALJ dismissed the claim on Section 33(g) grounds. The Board has now
remanded the matter stating that the ALJ must first explicitly determine
whether the tug company was potentially liable to both the claimant and the
employer for the injury in accordance with Section 33(a). The Board noted
that the employer bears the burden of producing evidence on this issue as
Section 33(g) is an affirmative defense.
The Board rejected the claimant’s specific contention that the employer’s
alleged “bad faith” in advising him that the carrier was out of business and
that the employer could not pay compensation due to a lack of reserves should
preclude the employer’s reliance on Section 33(g). Additionally the Board
noted that the doctrine of equitable estoppel did not apply. This doctrine
prevents one party from taking a position inconsistent with that which it took
in an earlier action such that the other party would be at a
disadvantage. It typically holds a person to a representation made, or a
position assumed, where it would be inequitable to another, who has in good
faith relied upon that representation or position. To apply this doctrine
to claims under the LHWCA, the Board noted that four elements are
necessary: (1) the party to be estopped must know the facts; (2) he must
intend that his conduct shall be acted on or must act so that the party
asserting the estoppel has a right to believe it is so intended: (3) the latter
must be ignorant of the facts; and (4) he must rely on the former’s conduct to
his injury. Rambo v. Director, OWCP, 81 F.3d 840, 843, 30 BRBS 27,
29(CRT) (9th Cir. 1996), vacated and remanded on other grounds
sub nom. Metropolitan Stevedore Co. v. Rambo, 521 U.S. 121, 31 BRBS
54(CRT) (1997).
The Board found that although the claimant contended that he filed his lawsuits
in response to his inability to obtain compensation from his employer and/or
carrier, the employer’s correspondence with the claimant was insufficient to
establish that the employer intended that the claimant take this action.
The Board also did not accept the claimant’s contention that it would have been
pointless to attempt to obtain the carrier’s written approval of the settlement
with the tug company because he had been advised that the company was out of
business. The Board noted that when an carrier is out of business, the
employer stands responsible. The Board further noted that even though the
employer’s attorney had stated that the employer did not have the reserves to
pay benefits, at some point after the claimant filed suit against the tug
company, it appears that the claimant was informed that there was insurance
coverage for his claim and the parties discussed a settlement of the LHWCA
claim.
Finally, the Board rejected the claimant’s contention that Section 7(h)
preserves his entitlement to medical benefits that accrued prior to the
settlement with the tug company. See Esposito v. Sea-Land Services,
Inc., 36 BRBS 10 (2002) (§ 7(h) does not preclude the applicability of the
§ 33(g)(1) bar to both compensation and medical benefits.); Wyknenko v. Todd
Pacific Shipyards Corp., 32 BRBS 16 (1998)(Smith, J., dissenting.)(§ 7(h)
does not support a conclusion that this holding is inapplicable to medical
benefits.).
Topic 33.7.4 Third-Party Settlements--Medical
Benefits
Esposito v. Sea-Land Service, Inc., 36 BRBS 10 (2002).
Here the Board rejected the claimant's assertions that the employer's actions
amounted to a constructive approval of a third-party settlement. The Board
found that the employer's involvement in the third-party litigation and
settlement was insufficient to render Section 33(g)(1) inapplicable. The Board
noted the very limited participation of the employer and found that it was less
than in some other cases where the Board had previously held that Section
33(g)(1) applied. Employer here was a named defendant in the tort suit; thus,
it did not appear in the case on the claimant's side. Second, the employer was
dismissed from the case nearly one and one-half years before the trial and
settlement, and the employer's attorney remained active only for discovery
purposes. The Board further noted that "While there is conflicting
evidence as to whether [employer's attorney] was aware of the settlement
process and the final negotiations, and as to whether he made a congratulatory
comment when informed of the ...settlement, the [ALJ] found that [employer's
attorney] was not involved in the negotiations themselves, and he did not sign
or consent to the general release." The Board found that employer's participation
in the third-party litigation did not rise to the level which would constitute
constructive approval of the settlement and render Section 33(g)(1)
inapplicable.
Next the Board addressed an issue of first impression, namely whether Section
33(g)(2) provides claimants with a means for retaining their entitlement to
medical benefits despite having lost their entitlement to compensation.
Referencing Estate of Cowart v. Nicklos Drilling Co., 505 U.S.
469 , 26 BRBS 49 (CRT) (1992); the language of Section 33(g) itself; and the
implementing regulation, 20 C.F.R. § 702.281, the Board concluded that a
claimant must obtain the prior written approval of a settlement for an amount
less than his entitlement under the LHWCA.
Topic 33.9 Exclusive
Remedy Against Officers Or Fellow Servants Of Employers
Hymel v. McDermott, Inc., 37 BRBS 160 (2003).
Here the claimant sued his employer under the LHWCA as well as in state court against
his employer and others, for negligence and intentional exposure to toxic
substances in the work place. Executive officers of the employer during the
claimant's employment (who were named as defendants in the state court suit)
moved to intervene in the LHWCA claim. The ALJ denied the motion to intervene,
finding that the issue raised by the interveners was not "in respect of
" a compensation claim pursuant to Section 19(a) of the LHWCA. In a
subsequent Decision and Order, the ALJ granted the claimant's motion to dismiss
the claimant's claim with prejudice, pursuant to Section 33(g), as he settled a
part of his state tort claim for less than his compensation entitlement without
employer's prior written approval. The interveners filed an appeal with the
Board. The Board dismissed the appeal, on the ground that as claimant's claim
was no longer pending, the interveners were not adversely or aggrieved by the
denial of their motion to intervene. Interveners then filed a motion for
reconsideration of the Board's dismissal.
The Board granted the motion for reconsideration, finding that the interveners
are adversely affected or aggrieved by the ALJ's denial of their petition. The
Board noted that Section 21(b)(3) of the LHWCA states that the Board is
authorized to hear and determine appeals that raise a "substantial
question of law or fact taken by a party in interest from decisions with
respect to claims of employees" under the LHWCA. However, turning to the
merits of the appeal, the Board found that the ALJ's decision was legally
correct. The Board noted Fifth Circuit case law to support the ALJ's
determination that he was without jurisdiction to rule on interveners'
entitlement to tort immunity in a state court suit, as that issue was not essential
to resolving issues related to the claimant's claim for compensation under the
LHWCA. The Board went on to note that even if the claimant's claim had still
been pending, the interveners' claim, while based on Section 33(i) of the
LHWCA, is independent of any issue concerning the claimant's entitlement to
compensation and/or medical benefits and the party liable for such. Section
33(i) does not provide the right of intervention.
Topic 33.10 Miscellaneous Areas Within
Section 33
[ED. NOTE: While not a LHWCA case, the
following may be noteworthy in a Section 33 context for its discussion of
"prevailing parties" and "consent decree."]
American Disability Association, Inc. v. Chmielarz,
289 F.3d 1315 (11th Cir. 2002).
In this ADA case, prior to trial, the parties entered into a settlement which
was "approved, adopted and ratified" by the district court in a final
order of dismissal, and over which the district court expressly retained
jurisdiction to enforce its terms. Subsequently, the Association sought
attorneys' fees and costs but the district court found that it was not a
"prevailing party" as that term was defined in Buckhannon Bd.
& Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 523 U.S.
598, 121 S.Ct. 1835 (2001) (Court specifically invalidated the "catalyst
theory."). However, the circuit court found that the Association plainly
was a "prevailing party" because the district court's approval of the
terms of the settlement coupled with its explicit retention of jurisdiction are
the functional equivalent of a consent decree.
The circuit court noted that in Buckhannon, the Supreme Court had
invalidated the catalyst theory because "[i]t allows an award where there
is no judicially sanctioned change in the legal relationship of the
parties." The Court said that a plaintiff could be a
"prevailing party" only if it was "awarded some relief" by
the court and achieved an "alteration in the legal relationship of the
parties." Buckhannon, 523 U.S. at 603-605. While the Court
had stated specifically that a plaintiff achieved such prevailing party status
if it (1) received at least some relief--including nominal damages--on the
merits, or (2) signed a settlement agreement "enforced through a consent
decree," the circuit court found that this did not mean that these were
the only two resolutions to form a sufficient basis upon which a plaintiff
could be found to be a prevailing party.
The circuit court stated: "Thus, it is clear that, even absent the entry
of a formal consent decree, if the district court either incorporates the terms
of a settlement into its final order of dismissal or expressly retains
jurisdiction to enforce a settlement, it may thereafter enforce the terms of
the parties" agreement. Its authority to do so clearly establishes a
'judicially sanctioned change in the legal relationship of the parties,' as
required by Buckhannon, because the plaintiff thereafter may return to
court to have the settlement enforced. A formal consent decree is unnecessary
in these circumstances because the explicit retention of jurisdiction or the
court's order specifically approving the terms of the settlement are, for these
purposes, the functional equivalent of the entry of a consent decree."
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