Carey v. Crane Service Co., Inc.

• Decision Date: 16 February 1983
• Docket Number: No. 81-991.,81-991.
• Parties: Harvey R. CAREY, et al., Appellants, v. CRANE SERVICE COMPANY, INC., et al., Appellees.
• Court: D.C. Court of Appeals

Page 1102

457 A.2d 1102

Harvey R. CAREY, et al., Appellants, v. CRANE SERVICE COMPANY, INC., et al., Appellees.

No. 81-991.

District of Columbia Court of Appeals.

Argued April 22, 1982.

Decided February 16, 1983.

William F. Mulroney, Washington, D.C., with whom Allen J. Lowe, Washington, D.C., was on the brief, for appellants.

J. Joseph Barse, Washington, D.C., with whom Robert E. Higdon, Washington, D.C., was on the brief, for appellees.

Before NEWMAN, Chief Judge, and NEBEKER and PRYOR, Associate Judges.

NEBEKER, Associate Judge:

This is an appeal from a judgment dismissing the complaint in summary judgment context. The case was filed by Harvey and Trithenia Carey, appellants, seeking damages for multiple permanent injuries sustained by Harvey Carey while working in the regular course of his employment with the C.J. Coakley Company.¹ Pursuant to D.C.Code 1973, § 36-501, Carey was covered by the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901 et seq. (1976) (hereinafter LHWCA), at the time of his accident.² Section 914(a) of the LHWCA requires that compensation "be paid periodically, promptly, and directly to the person entitled thereto, without an award, except where liability to pay compensation is controverted by the employer." (Emphasis added.) In compliance with § 914(a), the Coakley Company's insurance carrier promptly began Carey's compensation payments, filing at the same time the necessary standardized form with the Office of Workers' Compensation. That form computed Carey's payments according to the percentage formula set forth in § 908 of the LHWCA. Carey continues to receive compensation as thus calculated. Because it was undisputed that Carey's injuries occurred in the regular course of his employment, the Coakley Company did not contest its liability.

Section 933(a) of the LHWCA provides that an injured worker who accepts workers' compensation can also seek to recover against a third party who may be liable in damages.³ It is not necessary for the injured worker to elect whether to receive compensation or to recover against the third party. However, § 933(b) states:

Acceptance of such compensation under an award in a compensation order filed by the deputy commissioner or Board shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person unless such person shall commence an action against such third person within six months after such award. [Emphasis added.]

Two years after Carey's injury, appellants initiated this suit in negligence against the Crane Service Company, Inc. and the Hutchison Crane Company, Inc., appellees, as third-party tort-feasors. The trial court dismissed the suit. The court held that the right to recover damages from appellees was assigned to the Coakley Company when appellants failed to file their action within the first six months of Carey's workers' compensation payments as required by § 933(b). However, § 933(b) also requires that an injured worker accept "compensation under an award in a compensation order." Carey merely accepted the compensation payments due him which the insurance carrier promptly initiated as required by § 914(a) and which Carey's employer never contested. Such payments are "not compensation under award in a compensation order." Consequently, the six-month non-assignment period has not tolled. The judgment is reversed and the case is remanded with instructions to reinstate the complaint and for further proceedings.

On the day following Carey's accident and qualifying injuries, his employer filed Form BEC-202 (Employer's First Report of Accident or Occupational Illness) with the proper government offices, and on April 7, his employer's insurance carrier commenced disability compensation payments and filed Form BEC-206 (Payment of Compensation Without Award) with the deputy commissioner for this compensation district. As required by § 908 of the LHWCA, Form BEC-206 computed Carey's compensation at 66 2/3 per centum of his average weekly wage. No other order awarding Carey disability benefits was ever entered by the Benefits Review Board or the deputy commissioner. Carey continues to receive and accept compensation as provided by Form BEC-206. His payments have never been controverted.

On September 5, 1979, approximately thirty months after the accident, appellants filed this suit against appellees as third-party tort-feasors. Appellants alleged that the negligent operation of a crane by appellees' employee was the proximate cause of Carey's injuries. The trial court granted appellees' motion for summary judgment citing Rodriguez v. Compass Shipping Co. Ltd., 451 U.S. 596, 101 S.Ct. 1945, 68 L.Ed.2d 472 (1981), as dispositive. Rodriguez held that injured workers who are awarded workers' compensation cannot pursue their third-party claims after the statutory six-months expire.⁴ However, the Supreme Court in Rodriguez expressly chose not to address the issue which is presented in this case, i.e., whether payments of "compensation without an award" but in compliance with the LHWCA constitute "compensation under an award in a compensation order" as contemplated by § 933(b) of the LHWCA.⁵ Because this issue is one of first impression in this jurisdiction and requires the interpretation of § 933(b), it is necessary to begin by reviewing the LHWCA's 55 year history and § 933(b)'s several amendments.

When interpreting any portion of an act, the statutory meaning of a term or phrase must "be derived not from the reading of a single sentence or section, but from consideration of [the] entire enactment against the backdrop of its policies and objectives." Don't Tear It Down v. Pennsylvania Ave. Dev. Corp., 206 U.S.App.D.C. 122, 128, 642 F.2d 527, 533 (1980). Ever since the LHWCA's inception in 1927, its purpose has been to secure expeditious compensation independent of proof of fault for injured workers with limited, determinative liability for employers.⁶ See DiNicola v. George Hyman Construction, D.C.App., 407 A.2d 670, 672 (1979). When the statute was first enacted, the worker could elect between the certain recovery of compensation from his employer or the less certain, but probably more generous, remedy of an action for damages against a negligent third party. However, § 933(b) of the original act provided that the employee's election to accept compensation effected an immediate assignment to the employer of the employee's cause of action for negligence by third parties. The section read:

Acceptance of such compensation shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person, whether or not the person entitled to compensation has notified the deputy commissioner of his election.

Nothing more than acceptance of compensation was required to evidence the employee's election. He did not have the option of compensation and a suit against a third party. See Rodriguez, supra 451 U.S. at 604, 101 S.Ct. at 1950-51.

In 1938, Congress enacted a procedural change to § 933(b) in order to protect employees from the harsh consequences of an improvident election.⁷ The amended section stated:

Acceptance of such compensation under an award in a compensation order filed by the deputy commissioner shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person. [Emphasis added.]

For a few years there was disagreement about what constituted "compensation under an award in a compensation order." Third parties and employers who had been impleaded by third parties for indemnification purposes argued that mere acceptance of compensation still operated as a conclusive election not to sue. However, in 1945 the Second Circuit addressed the issue in Grasso v. Lorentzen, 149 F.2d 127 (2d Cir.), cert. denied, 326 U.S. 743, 66 S.Ct. 57, 90 L.Ed. 444 (1945).⁸ The court stated Before the statute was amended in June 1938, acceptance of compensation was enough under § 933(b) to operate as an assignment to the employer of the employee's cause of action against a third party, and thereafter there could be no election under § 933(a) to sue rather than to receive compensation. But after the amendment the phrase "acceptance of compensation" in § 933(b) was modified by the words "under an award in a compensation order filed by the deputy commissioner." As a result of the amendment there must now be some official action by the Deputy Commissioner establishing an award of compensation in order to make such acceptance an assignment of the employee's cause of action against a third party. Although the award may be informal, it must amount to an award by the Deputy Commissioner. The language and the legislative history of the amendment of 1938 show that it was intended to make the assignment effective only when compensation was accepted in accordance with such an award. [Id. at 128-29 (emphasis added) (citations omitted).]

Two years later the Supreme Court examined the issue and also held that the mere acceptance of compensation, without an award, does not preclude an injured worker from filing against a third-party tort-feasor. American Stevedores, Inc. v. Porello, 330 U.S. 446, 67 S.Ct. 847, 91 L.Ed. 1011 (1947).

During that same period, workers' compensation for longshoremen and harbor workers and the admiralty doctrine of seaworthiness were finally interwoven. That was an important juncture for the LHWCA. Prior to 1946, a longshoreman could only sue a third-party shipowner for negligence. The shipowner's "warranty of seaworthiness" for his vessel, which covered seamen and imposed virtual strict liability on the shipowner, was not extended to longshoremen as they were not employed by the shipowner.⁹ A longshoreman was considered an invitee on board the ship and the only duty owed by a shipowner to a...