Argonaut Ins. Co. v. Patterson

Decision Date08 June 1988
Docket NumberNo. 87-8491,87-8491
Citation846 F.2d 715
PartiesARGONAUT INSURANCE COMPANY, Petitioner, v. Arthur PATTERSON, Savannah Machine & Shipyard Company, Liberty Mutual Insurance Company and Continental Insurance Company; and Director, Office of Workers' Compensation Programs, United States Department of Labor, Respondents.
CourtU.S. Court of Appeals — Eleventh Circuit

Richard J. Harris, Brennan, Harris & Rominger, Savannah, Ga., for Argonaut Ins. Co.

John P. Reale, Drew, Eckl & Farnham, Atlanta, Ga., for Savannah.

B.H. Levy, Jr., Bouhan, Williams & Ivey, Randall K. Bart, Peter D. Muller, Savannah, Ga., for Liberty.

Hunter, MacLean, Exley & Dunn, Jonathan D. Sprague, R. Nathaniel Rackett, III, Savannah, Ga., for Continental Ins. Co.

Middleton & Anderson, Eugene C. Brooks, IV, Savannah, Ga., for Patterson.

Janet R. Dunlop, U.S. Dept. of Labor, Office of the Solicitor, Washington, D.C., for OWCP.

Petition for Review of an Order of the Benefits Review Board (Georgia Case).

Before HILL and JOHNSON, Circuit Judges, and TUTTLE, Senior Circuit Judge.

HILL, Circuit Judge:

Arthur Patterson brings this claim for compensation under the Longshore and Harbor Workers' Compensation Act ("the Act"), 33 U.S.C. Secs. 901-950 (1986). From 1956 to 1980 Arthur Patterson was employed with the Savannah Machine & Shipyard Company. During the majority of his years with Savannah Machine, Patterson was a sandblaster. Patterson contracted silicosis from his constant exposure to dust, and has been found to be permanently disabled as a result of the disease.

In 1974 the Georgia Health Department x-rayed all the Savannah Machine employees at the shipyard where Patterson worked. Authorities concluded that Patterson's x-ray was abnormal, and a doctor diagnosed his condition as silicosis, with an alternate diagnosis of tuberculosis. Although further tests indicated that Patterson did not have tuberculosis, Patterson received a one-year treatment designed to prevent tuberculosis. Dr. Walter W. Otto of the Chatham County (Georgia) Health Department treated Patterson in 1974 and 1975. Dr. Otto explains that it is likely he discussed silicosis with Patterson, but he has no notes describing their discussions and is not certain. R-1045. Patterson's "Employee's Claim for Compensation" form listed the date of injury as 1974. R-975. Patterson testified that in 1975 Dr. Otto informed him that his condition resulted from silicosis. R-539.

Dr. Otto believes that after the 1974 x-rays his office probably notified Savannah Machine of silicosis in several employees. R-1045-1047. Patterson's personal doctor, Dr. Charles P. Ryan, testified that sometime after July, 1977, he sent a letter to Patterson's employer explaining that work site dust was causing his patient problems. R-957. The ALJ found that it was "uncontroverted" that Patterson informed Savannah Machine of the problem sometime during 1975. R-743. Frank Lacy, claimant's supervisor at Savannah Machine, did not recall being told of Patterson's silicosis as early as 1975. R-1097-1098; R-1111-1114.

In any event, by 1975 Patterson knew that he should avoid dust, and at times was moved to less dusty working areas because of his condition. R-740. At no point during 1974 or 1975 was claimant ever in poor health or did he ever miss any work because of the silicosis. Id. In 1975, at the end of the one-year treatment for preventing tuberculosis, Dr. Otto told the claimant that he had successfully completed the course of treatment. R-1038.

On June 27, 1977, while working in an especially dusty area, claimant became ill for the first time. X-rays revealed a lesion in his lungs. R-740-741. During 1977, claimant twice missed approximately one month of work because of the silicosis. R-751. Patterson testified that a foreman asked him why he had to miss work, and that he "finally" told the foreman of the problem. R-833. As early as July 9, 1977, the employer authorized medical attention for the claimant. R-741. On October 17, 1977, a few months after claimant first became ill, the employer filed the Employer's First Report of Accident or Occupational Illness. Id. Patterson filed his claim for disability on December 9, 1977. Id.

Claimant was treated periodically in 1977 and 1978; during that time Patterson's health depended on the working conditions to which he was exposed. R-741. On January 5, 1979, claimant was reassigned to "light duty work," in which he continued to be employed sporadically until mid-1980. R-745. The light duties assigned to claimant consisted primarily of picking up trash in the shipyard. R-745. J.R. Harrington, a member of the Industrial Relations Department at Savannah Machine, stated that Patterson had been "treated with kid gloves," R-893, and that if plaintiff left the job the employer would "not necessarily," R-876, hire someone else to fill the job.

Up until March 9, 1976, Savannah Machine was insured with Argonaut Insurance Company. From March 9, 1976, to July 15, 1977, the employer was insured with Continental Insurance Company, and from that point until July 15, 1979, the employer was insured with Liberty Mutual. On July 15, 1979, Savannah Machine became self-insured. R-739.

The Administrative Law Judge ("ALJ") found that Patterson was temporarily totally disabled from July 11, 1977, to August 1, 1977, and from November 27, 1977, to December 16, 1977. According to the ALJ, Patterson became permanently and totally disabled as of January 5, 1979, when he was reassigned to light duty in the shipyard. The ALJ charged Liberty Mutual with the liability for all three periods of disability. R-751. The ALJ specifically considered the fact that Savannah Machine had retained the claimant in "light duty" after January 5, 1979, but determined that the wages Patterson had received for his work were not merited by the light duties he performed. Consequently, Patterson's continued employment was at the "benevolence" of the employer, and the fact that Patterson continued to work did not contradict the finding of total disability. R-748-749.

The ALJ found that Patterson had filed a timely claim given the fact that he first became aware of a disability in 1979, and alternatively held the claim timely either because Patterson was entitled to the tolling provision set forth in section 30(f), 33 U.S.C. Sec. 930(f), 1 or because Savannah Machine had constructive knowledge of the injury to Patterson. R-743-744.

Liberty Mutual appealed to the Benefits Review Board ("the Board"). The Board determined that Patterson became "aware" of his disability and the fact that it was work-related sometime between December, 1974, and April, 1975. Patterson v. Savannah Machine & Shipyard, 15 Ben.Rev.Bd.Serv. 38, 40 (1982). Although Patterson did not file his claim until 1977, the Board nevertheless found the claim timely under the tolling provision in section 30(f). Id. at 40-41. The Board upheld the finding of total disability, and the conclusion that employment subsequent to January 5, 1979, was at the beneficence of the employer. Id. at 42-43. The Board refused the employer's request for a credit for wages paid, noting that the Act makes no provision for such an offset. Id. at 43.

The Board remanded for consideration of the issue of whether the employer was entitled to the liability limitation in section 8(f), 33 U.S.C. Sec. 908(f). Id. at 43. The ALJ decided that the special fund set up by 33 U.S.C. Sec. 944 could be used pursuant to section 8(f) to relieve the employer of full liability. R-114.

The Director appealed the award of section 8(f) relief, and Argonaut appealed the ALJ's ruling that the statute of limitations ought to be tolled because Savannah Machine had actual knowledge of Patterson's condition in 1975. The Board stated that in its first opinion it had "fully considered," R-3, the issue raised by Argonaut, and affirmed the 8(f) relief contested by the Director. 2 R-4.

Argonaut appealed to this court, presenting four issues for our review. Argonaut first challenges the date of injury selected by the Board, and the choice of liable carrier which flowed from the designation of the date. Next Argonaut takes issue with the finding by the Board and by the ALJ that the time for filing Patterson's claim was tolled because the employer was aware of the injury. Thirdly Argonaut maintains that, given Patterson's subsequent employment at Savannah Machine, the Board and the ALJ incorrectly determined that Patterson was totally and permanently disabled. Finally Argonaut contests the Board's finding that Savannah Machine was not entitled to a credit against disability benefits for wages paid to Patterson after the date of disability.

Our review of the Board's two opinions is limited: "[a]lthough the standard of review in this Court is not set out in the statute, it is evident that we are to review only for errors of law, and to make certain that the Board adhered to its statutory standard of review of factual determinations." Presley v. Tinsley Maintenance Service, 529 F.2d 433, 436 (5th Cir.1976). See also American Mutual Liability Ins. Co. v. Smith, 766 F.2d 1513, 1515 n. 3 (11th Cir.1985).

I. THE DATE OF INJURY AND THE LIABLE CARRIER
A. The Rule for Allocating Liability.

Faced with the difficult task of assigning liability among a host of potentially liable carriers, the Second Circuit enunciated a standard geared to easing the assignment process:

[W]e conclude that the Congress intended that the employer during the last employment in which the claimant was exposed to injurious stimuli, prior to the date upon which the claimant became aware of the fact that he was suffering from an occupational disease arising naturally out of his employment, should be liable for the full amount of the award.... [T]he treatment of carrier liability was intended to be handled in the same manner as employer liability, and ... the carrier who last insured the "liable" employer during claimant's tenure of...

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