Mike Hooks, Inc. v. Pena

• Decision Date: 28 February 1963
• Docket Number: No. 19522.,19522.
• Citation: 1963 AMC 355,313 F.2d 696
• Parties: MIKE HOOKS, INC., Appellant, v. Gonzalo PENA, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

1963 AMC 355, 313 F.2d 696 (1963)

MIKE HOOKS, INC., Appellant, v. Gonzalo PENA, Appellee.

No. 19522.

United States Court of Appeals Fifth Circuit.

January 30, 1963.

Rehearing Denied February 28, 1963.

Walter E. Workman, Houston, Tex., Baker, Botts, Shepherd & Coates, Houston, Tex., of counsel, for appellant.

Bob J. Spann, Corpus Christi, Tex., for appellee.

Before TUTTLE, Chief Judge, and HUTCHESON and BROWN, Circuit Judges.

JOHN R. BROWN, Circuit Judge.

To the never ceasing riddle of the ambiguous amphibious worker with its tricornered intramural controversy between state-federal compensation and the ubiquitous possibility of a pseudo-seaman's claim¹ and the mutations in the vast body of the law as it passed through the phases of maritime but local,² the twilight zone,³ the first-come-first-served theory⁴ and, as some might characterize the most recent development, the doctrine of the last chance,⁵ this case adds a further wrinkle. The question is whether determination of a non-seaman status made by the Industrial Accident Board of Texas forecloses a subsequent suit as a seaman under the Jones Act, 46 U.S.C.A. § 688. More precisely, and in more conventional terms, the question is whether such determination is res judicata. The District Court, denying the Employer's motion for summary judgment, held that the seaman's suit was not foreclosed either by res judicata or collateral estoppel. On this interlocutory appeal under 28 U.S. C.A. § 1292(b), we agree and affirm, although not on exactly the same reasoning.⁶

As is so often true for knotty problems, the facts for our purposes are neither complex nor conflicting. Pena, the Employee, worked for Mike Hooks, Inc., the Employer, in connection with its small floating dredge GAYLE. While handling the dredge's discharge line,⁷ the Employee injured his hand. The Employer routinely filed the report of injury with the Industrial Accident Board as required by the Texas Workmen's Compensation Act.⁸ Within the time permitted the Employee filed formal written notice and claim for compensation.⁹ The case was set down for hearing under the Board's rules and practices. No question existed at that time concerning coverage or disability and benefits were voluntarily paid by the Insurance Carrier¹⁰ for 19 weeks without hearing or formal administrative action. By appropriate proceedings, the Employee through counsel then sought additional compensation. This is what precipitated the actions which bring about the problem now before us.

While the record does not indicate how or in what manner it first came about, it is clear that at the time these supplemental proceedings were initiated before the Board, the substantial controversy was between, not the Employee and the Carrier, but rather between the Employer and the Insurance Carrier. Someone had raised the question whether the Employee was a seaman, and hence not covered by the Act. More important, this triggered a controversy between the Insurance Carrier and the Employer since the Insurance Carrier was contending that its workmen's compensation insurance policy did not protect the Employer against claims for damages based upon the maritime law or the Jones Act.¹¹ To avoid these problems of policy coverage, the Employer was simply taking the frontal position that the Employee was not a seaman and was, on the contrary, clearly subject to the State Compensation Act.

About ten days before the scheduled hearing before the Board, the Insurance Carrier formally stated to the Board that "there is a serious question of jurisdiction involved. It is possible that this matter may fall under the Jones Act." On the day of the hearing, the Employer entered the proceedings for the first time. Through separate counsel it filed its letter-application for determination that the Employee was covered under the Texas Act and was not a seaman.¹²

The Employee made no effort to controvert this contention or the evidence offered in support of it. But on that very same day the Insurance Carrier in its last authoritative formal statement to the Board¹³ categorically declared "* * * the insurer admits liability and has paid benefits under the Texas Compensation Act. It therefore appears that the jurisdiction of your Honorable Board is admitted by both parties and is not in question."¹⁴

The Board thereafter rendered its final award granting compensation for 60 weeks (with credits for prior payments). Under the stereotyped form, the Board found in paragraph 7 "Special Findings and Orders" that the Employee was not a seaman. The Board used the identical language of the Employer's application (see note 12, supra). The Employee, although having a statutory right to file a suit for trial de novo of this and all other issues,¹⁵ filed no such suit. Art. 8307 § 5. The award was therefore final.

A few months thereafter the Employee filed a civil action in the Court below seeking recovery as a seaman for negligence and unseaworthiness and for maintenance, wages and cure. To this complaint, the Employer filed a motion for summary judgment on the ground of res judicata or collateral estoppel. Annexed were supporting documents showing the prior proceedings before the Industrial Accident Board culminating in the final award.

While we reject the Employer's appeal, we can agree with several of its subsidiary contentions. Thus, for a litigated matter within the jurisdiction of the Industrial Accident Board, a final award if not appealed from has the same conclusiveness and binding effect as a final judgment of a court.¹⁶ Likewise, it is now clear, that if the jurisdiction of a tribunal is actually brought into question in the proceeding before it, such tribunal has the power to determine its own jurisdiction, and once determined, whether right or wrong, that decision cannot ordinarily be attacked collaterally.¹⁷ Putting to one side for the moment the decisive question whether the Employer could inject itself into these proceedings to thereby become a party, we can also assume that the status of this Employee as a seaman or non-seaman was directly presented as between Employer and Employee. The Compensation Act is so constructed as to extend benefits only to those who are an "Employee" and expressly excluded are "masters or seamen on vessels engaged in interstate or foreign commerce." Art. 8309 § 1.

The District Court was therefore in error in the stated reason (note 6, supra) that only the federal courts could legally determine the status of seaman. This basically confused two separate questions. The first is the matter of the proper substantive standard to be applied — here the federal maritime principles with statutory modifications, such as the Jones Act. The second is the power of a tribunal to determine status (or any other significant fact) upon which, in turn, it determines whether it does, or does not, have jurisdiction.¹⁸ The consequence may often be, then, that a tribunal which does not actually have jurisdiction nevertheless acquires it through its own erroneous decision. Thereby it imposes on the parties substantive standards which really are legally inapplicable.

This is illustrated by decisions posing an analogous contest between state compensation acts and, where applicable, superior FELA statutory standards for injured interstate railroad workers. 45 U.S.C.A. § 51 et seq. There the status question turns on intra or interstate employment. With recognition that a State cannot impose State workmen's compensation on an injured interstate railroad worker, the Supreme Court nevertheless applied the doctrine of res judicata to foreclose a subsequent FELA suit where the State compensation tribunal in an adversary hearing determined that the worker was engaged in intrastate employment. Chicago, Rock Island & Pacific Ry. v. Schendel, 1926, 270 U.S. 611, 616, 617, 46 S.Ct. 420, 70 L.Ed. 757.¹⁹ Perhaps a different result is indicated where there is no real contest.²⁰ But reserving for future decision the question whether this principle will have full application in this area of the ambiguous worker,²¹ we may assume that it does and yet we are compelled to reach the conclusion that the Board's award does not foreclose the seaman's damage suit as res judicata or collateral estoppel. This conclusion rests on the legal-fact that the Employer was not really a party.

In analyzing this conclusion, two things must, of course, be acknowledged. The first is that the Employer did file — and the Board acted on — a formal statement with supporting evidence concerning the Employee's status. Second, the various forms for Notice of Injury, Claim for Compensation have appropriate blanks in which to insert the name of the injured person's employer and the manifold form of the final award is so arranged that the caption shows blank spaces in which to type the name of the "Employee" followed by "vs. Employer" and "insurance carrier." But examination of the structure of the Texas Compensation Act demonstrates that as to the first there is no place for the employer as a real party in the Board's adjudicatory responsibilities and as to the second, the reference to the "employer" in the formal award is purely for identification purposes.

The Texas Act, unlike the usual compulsory schemes, is voluntary in the sense that the only sanction is to deprive an eligible employer of specified common law defenses.²² Similarly, but more significant here, the obligations to pay compensation, to provide medical attention and other statutory benefits, is imposed solely and directly on the insurance carrier,²³ with no such obligation, direct or indirect, primary or secondary, resting on the employer.²⁴

Of course, since it is a scheme to compensate workers (or their beneficiaries) for industrial injuries, the employer does have some important duties in establishing the machinery, setting it in motion and in supplying essential information. Thus, the employer must give notice to his...