Guevara v. Maritime Overseas Corp.

• Decision Date: 30 September 1994
• Docket Number: No. 92-4711,92-4711
• Citation: 34 F.3d 1279
• Parties: , 63 USLW 2226 Domingo GUEVARA, Plaintiff-Appellee, v. MARITIME OVERSEAS CORPORATION, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1279

34 F.3d 1279

1995 A.M.C. 321, 63 USLW 2226

Domingo GUEVARA, Plaintiff-Appellee, v. MARITIME OVERSEAS CORPORATION, Defendant-Appellant.

No. 92-4711.

United States Court of Appeals Fifth Circuit.

Sept. 30, 1994.

Rehearing En Banc Ordered Nov. 4, 1994.

Thomas B. Greene, III, Crain, Caton & James, Houston, TX, for appellant.

Dennis Michael McElwee, Schechter & Eisenman, Houston, TX, for appellee.

Appeal from the United States District Court for the Eastern District of Texas.

Before GOLDBERG, GARWOOD and WIENER, Circuit Judges.

PER CURIAM:

In this case we uphold an injured seaman's recovery of damages under the Jones Act. Fifth Circuit precedent also compels us to uphold an award of punitive damages for the shipowner's failure to timely pay maintenance and cure.

I. Facts and Proceedings Below

Plaintiff-appellee Domingo Guevara (Guevara) was injured on May 29, 1990, while serving as a member of the crew on the vessel OVERSEAS PHILADELPHIA, owned and operated by Guevara's employer, defendant-appellant Maritime Overseas Corporation (Maritime). The crew was preparing the ship to sail from Freeport, Texas, and Guevara was helping to secure the gangway, the size of which required that it be lifted by the ship's crane. The task was being performed in the midst of considerable wind and rain. Guevara was standing on a catwalk on the vessel pursuant to the orders of the vessel's bosun, Guevara's superior, who was operating the crane. As the gangway was lifted, it swayed in Guevara's direction and the bosun ordered him to move away from where he was standing. But when Guevara tried to move, he momentarily caught the tread of his boot in the catwalk grating. Freeing himself, Guevara jumped from the catwalk to the deck below to avoid being hit by the gangway.

Guevara injured his knee in the fall. He promptly reported his injury to the third mate and was given assistance. Despite his injury, Guevara continued to work on the vessel (apparently to qualify for union benefits) for a period of four months. Upon the vessel's return to port, Guevara saw a doctor who diagnosed him as having a torn medial meniscus and a torn anterior cruciate ligament. Although initially Guevara was reluctant to undergo surgery, his knee was operated on in February 1991.

Guevara, through his attorney, made a number of formal demands on Maritime for maintenance and cure beginning on February 5, 1991. ¹ Maritime, however, made no payment until at least June 24, 1991. Despite subsequent demands, Guevara did not receive his second and final payment until December 29, 1991.

Guevara brought a negligence claim under the Jones Act, 46 U.S.C.App. Sec. 688, and an unseaworthiness claim under general maritime law, against Maritime. He also sought punitive damages for Maritime's failure to pay maintenance and cure on a timely basis. The jury returned a verdict in Guevara's favor, finding Maritime negligent, the OVERSEAS PHILADELPHIA unseaworthy, and Guevara not negligent. The jury awarded Guevara $131,000 in compensatory damages for his May 29, 1990, injury, and $60,000 in punitive damages for Maritime's arbitrary and capricious failure to pay maintenance and cure. Maritime now appeals.

II. Discussion

A.

Maritime argues that the district court erred in denying its motions for judgment notwithstanding the verdict on Guevara's negligence and unseaworthiness claims. Maritime also challenges the jury's award of punitive damages for Maritime's failure to pay maintenance and cure. We first consider whether there is sufficient evidence to support the jury's finding that Maritime was negligent. In this regard, Maritime is obliged to swim upstream against a fast current because the standard of review to be applied to a jury verdict in a Jones Act case is highly deferential. The jury's verdict must stand unless there is a complete absence of probative facts to support it. See, e.g., Wilson v. Zapata Off-Shore Co., 939 F.2d 260, 266 n. 9 (5th Cir.1991).

There is enough evidence in the record to meet this lenient standard. Guevara's theory of liability is that he had been standing on the catwalk at the direction of the bosun, who then lifted the gangway without first making sure that he (Guevara) was in a safe position. The captain of the vessel testified that the bosun is to blame if he performs such an operation without first ascertaining that none of his men are in harm's way. ² The jury could have concluded from this testimony that the bosun, and hence Maritime as his employer, was negligent. Because we uphold the jury's finding that Maritime was negligent and therefore liable under the Jones Act, we need not decide whether the jury correctly found Maritime's vessel to be unseaworthy under the general maritime law. ³

B.

We now turn to Maritime's challenge to the jury's award of punitive damages to Guevara. Maritime argues, first, that Miles v. Apex Marine Corp., 498 U.S. 19, 111 S.Ct. 317, 112 L.Ed.2d 275 (1990), bars the recovery of punitive damages for failure to pay maintenance and cure, and, second, that even if punitive damages are available in such circumstances, a reasonable jury could not have concluded that Maritime acted in an arbitrary and capricious manner. We will discuss the second issue first.

Under the law of this Circuit, a shipowner who refuses to pay maintenance and cure is subject to

"an escalating scale of liability: a shipowner who is in fact liable for maintenance and cure, but who has been reasonable in denying liability, may be held liable only for the amount of maintenance and cure. If the shipowner has refused to pay without a reasonable defense, he becomes liable in addition for compensatory damages. If the owner not only lacks a reasonable defense but has exhibited callousness and indifference to the seaman's plight, he becomes liable for punitive damages and attorney's fees." Morales v. Garijak, Inc., 829 F.2d 1355, 1358 (5th Cir.1987).

A shipowner becomes liable for punitive damages when its refusal to pay maintenance can be described as callous and recalcitrant, arbitrary and capricious, or willful, callous, and persistent. See id. In this case, the jury answered yes to the question whether Maritime "arbitrarily and capriciously failed to provide maintenance to the plaintiff, Domingo Guevara on a timely basis?" and awarded $60,000 in punitive damages. ⁴ A reasonable jury could have so concluded.

The parties stipulated that Guevara's attorney made formal demands for maintenance by letter on six occasions: February 5, 1991; February 26, 1991; April 4, 1991; June 7, 1991; August 21, 1991; and January 31, 1992. Maritime's first payment, for $448, was not received by Guevara until sometime after June 24, 1991. ⁵ Maritime's second payment, for $1,344, was not received by Guevara until December 29, 1991. Guevara argues that, because nearly five months passed between his initial demand and Maritime's first payment, there is adequate support for the jury's verdict. Maritime correctly argues that it was entitled to a reasonable period of time in which to investigate the legitimacy of Guevara's claim. See McWilliams v. Texaco, Inc., 781 F.2d 514, 519 (5th Cir.1986) ("Where doubt exists ... a vessel owner may request reasonable documentation from a seaman before it commences payment of maintenance that may prove both lengthy and expensive"). However, that excuse is unavailable where a shipowner is guilty of "laxness in investigating a claim that would have been found to be meritorious." Breese v. AWI, Inc., 823 F.2d 100, 104 (5th Cir.1987). In McWilliams, the shipowner withheld maintenance payments until it received medical documentation of the seaman's claim; after receiving such documentation, the shipowner commenced payments "shortly thereafter." 781 F.2d at 519. Here, the medical records compiled by the physician treating Guevara's injury were forwarded to Maritime along with Guevara's February 5, 1991, and March 4, 1991, demands for maintenance, yet Maritime made no payment until several months later. In any event, even if the delay between Guevara's first demand and Maritime's first payment could be explained as a reasonable investigatory period, the jury was entitled to conclude that the six-month delay between Maritime's first payment and its second payment, received by Guevara practically on the eve of trial, could not. Under the facts here, since Maritime had commenced payment, the jury could properly find that the second delay could not be explained as time needed to investigate Guevara's claim. ⁶ Thus, the record supports the jury's award of punitive damages under the prevailing law of this Circuit.

C.

Maritime also argues that Guevara's recovery of punitive damages is barred by the Supreme Court's decision in Miles. There, the parents of a seaman killed by a fellow crew member sought to recover damages for loss of society under general maritime law in a cause of action for unseaworthiness. A unanimous Court held that, although the wrongful death of a seaman is actionable under general maritime law, damages recoverable in such actions do not include loss of society. The second of these two holdings is of principal concern here, although the Court's analytical methodology was the same for each. Following the course first set by Moragne v. States Marine Lines, Inc., 398 U.S. 375, 90 S.Ct. 1772, 26 L.Ed.2d 339 (1970), the Miles Court tackled the question of the availability of remedies for wrongful death under general maritime law by seeking guidance from comparable federal statutes.

"We no longer live in an era when seamen and their loved ones must look primarily to the courts as a source of substantive legal protection from injury and death; Congress and the States have legislated extensively in these areas. In this era, an admiralty court should look primarily to these legislative enactments for policy guidance. We may supplement these statutory remedies where doing so would achieve the uniform...