96-1013 La.App. 4 Cir. 6/24/98, Abuan v. Smedvig Tankships, Ltd.

• Decision Date: 24 June 1998
• Citation: 717 So.2d 1194
• Parties: 96-1013 La.App. 4 Cir
• Court: Court of Appeal of Louisiana — District of US

Page 1194

717 So.2d 1194

96-1013 La.App. 4 Cir. 6/24/98

Nestor ABUAN, as guardian on Behalf of Carlos VALDEZ v. SMEDVIG TANKSHIPS, LTD., et al.

No. 96-CA-1013.

Court of Appeal of Louisiana, Fourth Circuit.

June 24, 1998.

Rehearing Denied Sept. 15, 1998.

Richard J. Dodson, David C. Vidrine, Kenneth H. Hooks, III, Dodson & Vidrine, APLC, Baton Rouge, and A.N. Yiannopoulos, Professor, Eason Weinmann Center for Comparative Law, Tulane University, New Orleans, and Symeon Symeonides, Professor of Law, Baton Rouge, and B.K. Agnihotri, Chancellor and Professor of Law, Southern University, Law Center, Baton Rouge, for Plaintiff/Appellee Nestor Abuan, as guardian on Behalf of Carlos Valdez.

David B. Lawton, L.R. DeBuys, IV, Terriberry, Carroll & Yancey, New Orleans, for Defendants/Appellants Smedvig Tankships, Ltd., et al.

Before SCHOTT, C.J., and BARRY, KLEES, LANDRIEU and MURRAY, JJ.

[96-1013 La.App. 4 Cir. 1] MURRAY, Judge.

The defendants, Smedvig Tankships, Ltd., Smedvig Tankships (Agencies), Ltd., Smedvig Tankships Management, Ltd., Smedvig Tankships, A.S., a/d/a Smedvig Tankrederi A.S., Peder Smedvig, A.S., Peder Smedvig Singapore, Ptd., Ltd., K.S. Smedvig Tankers V, and K.S. Smedvig Tankers VI, (hereafter referred to as the Smedvig group) appeal a judgment in favor of plaintiff, Carlos Valdez ¹, in the amount of $5,042,563.00, plus costs and interest. We reverse in part and affirm in part.

Carlos Valdez signed on board the M/T Vestri on March 27, 1993, at Philadelphia, Pennsylvania. Mr. Valdez, who was hired as an engine room cadet, was injured on May 26, 1993, when the engine room crane collapsed and a piston fell on him. This incident occurred in international waters approximately 84 miles off the coast of Florida while the Vestri was on a voyage between Houston, Texas and Philadelphia, Pennsylvania. Mr. Valdez was flown to a hospital in Key West, [96-1013 La.App. 4 Cir. 2] Florida where he was diagnosed with multiple significant traumas, and two serious leg fractures. On May 27, 1993, Mr. Valdez fell into a coma, lasting nearly a month, which was caused by a fat embolism related to the fractures he sustained while on the Vestri. He was hospitalized until July 2, 1993, when he was transferred to a rehabilitation hospital and ultimately to a community re-entry center. Mr. Valdez was discharged from the latter facility, and lived with friends in Miami until being admitted to the Rehabilitation Living Center in New Orleans.

On August 22, 1994, this action was brought on Mr. Valdez' behalf in the district court in Plaquemines Parish, pursuant to the "Savings-to-Suitors" clause, 28 U.S.C. § 1333. The plaintiff asserted jurisdiction over the defendants by virtue of an in rem arrest or attachment of a vessel owned by the defendants while it was physically located in Plaquemines Parish. ² The petition sought relief under the Jones Act, the General Maritime Law, and alternatively under the law of either the Philippines or Norway, which Mr. Valdez alleged to be the same as that of the United States.

The defendants filed declinatory and peremptory exceptions and a motion to dismiss based on a forum selection clause in Mr. Valdez' contract of employment with the agent for Peder Smedvig Singapore PTE, Ltd. (hereafter referred to as the overseas employment contract). The exceptions and motion were denied. Defendants appealed the trial court's refusal to enforce the forum selection clause, and Mr. Valdez moved to dismiss that appeal. This court denied the motion, but converted the appeal to an application for supervisory writ when the Supreme Court ruled that it was error to have denied the dismissal. The trial, which had [96-1013 La.App. 4 Cir. 3] been rescheduled for its original setting after the defendants' appeal was dismissed, was stayed by this court pending its consideration of the writ application. The writ application was denied, with one dissent. ³

Following a three day bench trial in September, the trial court entered judgment in favor of Mr. Valdez, and assigned reasons for that judgment. The defendants timely appealed, arguing that the trial court erred by refusing to enforce the forum selection clause and by its application of United States law to Mr. Valdez' claims. The defendants also argued that the damages awarded were excessive and erroneous as a matter of law. The appeal was argued, and then reargued before a 5-judge panel in accordance with LSA-Const. Art. 5, § 8 B. The parties were allowed to file supplemental briefs following the reargument. In addition, the parties requested and were granted leave to brief the applicability of the Supreme Court's decision in Lejano v. K.S. Bandak, 97-0388 (La.12/12/97), 705 So.2d 158, to this case.

THE FORUM SELECTION CLAUSE:

There is no question that the district court had jurisdiction of Mr. Valdez' claim. The question raised by defendants in their first assignment of error is whether the court should have declined to exercise that jurisdiction and require Mr. Valdez to bring his claim in the Philippines or Norway as provided in the overseas employment contract. The district court found that the forum selection clause contained in the overseas employment contract was not enforceable against Mr. Valdez under the law of the United States, the Philippines, or Norway. The Smedvig group contends that the provisions of this contract, which incorporates the terms and conditions of the "standard employment contract governing the [96-1013 La.App. 4 Cir. 4] employment of all Filipino seamen on board ocean-going vessels" approved by the Philippine Overseas Employment Administration (POEA), should be enforced.

In Lejano, supra, the Supreme Court considered the enforceability of a forum selection provision that is indistinguishable from the one at issue here. Mr. Lejano was a Philippine seaman who had been seriously injured in international waters on board a vessel owned by a Norwegian corporation. He was treated for an extended period of time in Miami and then repatriated to the Philippines. The trial court had ruled that the forum selection clause in Mr. Lejano's overseas employment contract was enforceable and ordered him to file suit in the Philippines or Norway; and the appellate court denied writs. Lejano v. Bandak, 95-1011 (La.App. 5 Cir. 1/15/97), 688 So.2d 86. Citing conflicting decisions of the state appellate courts, Mr. Lejano petitioned the Supreme Court to grant certiorari in order provide guidance to the lower courts on the issue of forum selection clauses and maritime tort suits. The Court granted the writ. Lejano v. Bandak, 97-0388 (La.4/4/97), 692 So.2d 407.

In his brief on the merits, Mr. Lejano argued that a state court considering an action brought pursuant to the Savings to Suitor's clause must apply federal substantive law, but was free to apply its own procedural law. ⁴ Justice Johnson, writing for the Court, rejected this argument. The Court determined that Mr. Lejano's employment contract, which was a contract for the hire of a sailor to man a ship, fell within its admiralty jurisdiction. For this reason, a Louisiana court sitting in admiralty should consider the validity and enforceability of such clauses [96-1013 La.App. 4 Cir. 5] in accordance with federal law and standards. Lejano, 97-0388 at p. 14, 705 So.2d at 166.

The Court then concluded that, under federal law, "[a] forum selection clause should control absent a strong showing that it should be set aside." Id. at p. 15, 705 So.2d at 167. (Emphasis added, citation omitted.) Because the forum selection clause executed by Mr. Lejano repeated the language in a collective bargaining agreement between The Norwegian Shipping and Offshore Federation ("ASO") and The Associated Marine Officers' and Seaman's Union of the Philippines ("AMOSUP"), of which Mr. Lejano was a member, the Court rejected his argument that he had no power to negotiate the terms of the agreement so that the clause should be declared invalid. Mr. Lejano's claim that he did not understand the language in which the contract was written was determined to be irrelevant in light of the "Philippine employment services' structure, the fact that the POEA [Philippine Overseas Employment Administration] acted on his behalf in negotiating and bargaining for the terms of the contract and the fact that Mr. Lejano signed the POEA-approved contract, thereby submitting to the terms thereof, and consequently, being afforded any benefits and advantages of other provisions of the contract." Id. at p. 18, 705 So.2d at 168.

The Smedvig group argues that Lejano is controlling, and requires a reversal of the trial court's decision and enforcement of the forum selection clause in this case. However, the record contains evidence that clearly distinguishes Mr. Valdez' situation from that of Mr. Lejano. Mr. Valdez, unlike Mr. Lejano, was not a member of (AMOSUP), the Philippine union that was a party to the collective bargaining agreement (hereafter CBA) from which the POEA contract was derived. He was not a veteran seaman. In fact, he had never been to sea [96-1013 La.App. 4 Cir. 6] before he joined the Vestri in Philadelphia where he executed the shipping articles, his contract of employment with the ship. The CBA between Peder Smedvig Singapore PTE, Ltd. and AMOSUP provides that it will be applicable to Filipino officers who are members of the Union. Mr. Valdez was not an officer, he was a cadet. The CBA provides that cadets are excluded from paying union dues. Unlike the officers to whom the CBA was applicable a cadet received a stipend rather than the compensation paid a regular salaried crewmember. Mr. Valdez was required to execute an affidavit in Manila attesting to his understanding of this difference between the compensation paid him and regular crew members. Attached to the CBA is an appendix which lists the AMOSUP members in the Vestri crew; Carlos Valdez' name does not appear on that list. Mr. Valdez testified that he had...