Bertram v. Freeport McMoran, Inc.

• Decision Date: 07 October 1994
• Docket Number: No. 93-7575,93-7575
• Parties: Hugh Thomas BERTRAM, Plaintiff, v. FREEPORT McMORAN, INC., et al., Defendants. HOUMA INDUSTRIES, INC., Defendant-Appellant, v. ENERGY CATERING SERVICES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1008

35 F.3d 1008

1995 A.M.C. 707

Hugh Thomas BERTRAM, Plaintiff, v. FREEPORT McMORAN, INC., et al., Defendants.

HOUMA INDUSTRIES, INC., Defendant-Appellant, v. ENERGY CATERING SERVICES, INC., Defendant-Appellee.

No. 93-7575.

United States Court of Appeals, Fifth Circuit.

Oct. 7, 1994.

Carrie Weitinger, Don Weitinger, Weitinger & Weitinger, Houston, TX, for appellant.

J. Daniel Picou, Morgan J. Wells, Jr., Leininger, Larzelere & Picou, Metairie, LA, for appellees.

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

Before POLITZ, Chief Judge, and DUHE and BARKSDALE, Circuit Judges.

RHESA HAWKINS BARKSDALE, Circuit Judge:

Primarily in issue are (1) whether an employer's right to be reimbursed by third-party tortfeasors for maintenance and cure paid by the employer to its injured employee is barred by the employee's pre-trial settlements with the third-parties; and, (2) in that the employer was not assigned fault, but the employee was, resulting in the third-party tortfeasors' apportioned fault totalling less than 100%, whether the maintenance and cure should be reimbursed totally by the third-party tortfeasors, or whether, instead, each should reimburse only according to its apportioned fault, resulting in less than full reimbursement.

Energy Catering Services, Inc., paid maintenance and cure for its employee, Hugh Thomas Bertram, as a result of an accident for which no fault was assigned Energy, Bertram was found 60% at fault, and Houma Industries, Inc., and another third-party were each apportioned 20% of the fault. Before trial, Bertram settled with Energy and Houma, and the other tortfeasor. Houma contests having to reimburse Energy for the maintenance and cure, primarily because of a claimed settlement bar which it asserts springs, in part, from the modern trend in admiralty of apportioning fault. And, as one of its alternative bases for challenging the judgment, Houma maintains, again seeking shelter under that trend, that it should not have to reimburse 50% of the maintenance and cure, because it was apportioned only 20% of the fault. We AFFIRM.

I.

Bertram, an Energy employee, was assigned to work aboard a drilling barge owned by Offshore Pipelines, Inc. (OPI). The vessel was anchored next to a fixed oil and gas platform owned by Freeport-McMoran, Inc., and Freeport-McMoran Oil & Gas Co. (collectively, Freeport) and located on the Outer Continental Shelf off the coast of Louisiana. Houma Industries, Inc., was a contractor on the platform. In November 1990, while returning to the barge from the platform, Bertram was injured on the platform by a falling ladder, which Houma's employees had used and had been directed to secure.

Bertram sued under the Jones Act and general maritime law, seeking recovery from Energy for maintenance and cure; and from Energy and OPI for negligence and unseaworthiness. He later added negligence claims against Freeport and Houma. Energy cross-claimed against Houma and Freeport for contribution or indemnity; they did likewise against Energy.

Prior to trial, Bertram settled with all defendants: OPI (shipowner), Freeport (platform owner), Houma (platform contractor), and Energy (employer). Therefore, only the cross-claims remained: Energy's against Houma and Freeport for maintenance and cure reimbursement; theirs against Energy for indemnity or contribution.

In July 1993, the district court ruled in favor of Energy. ¹ It found Energy without fault for Bertram's injuries, and apportioned fault as follows: Bertram, 60%; Houma and Freeport, each 20%. But, by an amended judgment, and although Houma and Freeport had each been found only 20% at fault, each was required to reimburse Energy for 50% of the approximately $143,000 paid for maintenance and cure. Only Houma appeals.

II.

Maintenance and cure is a seaman's right under general maritime law to receive a "per diem living allowance for food and lodging [maintenance] and ... payment for medical, therapeutic and hospital expenses [cure]". Black's Law Dictionary 954 (6th ed. 1991); Davis v. Odeco, 18 F.3d 1237, 1245-46 (5th Cir.), cert. denied, --- U.S. ----, 115 S.Ct. ----, --- L.Ed.2d ---- (1994). A shipowner must pay maintenance and cure to any seaman who "becomes ill or suffers an injury while in the service of a vessel", regardless of whether either party was negligent. 1B Ellen M. Flynn et al., Benedict on Admiralty Sec. 42, at 4-5 (7th ed. 1993) (hereinafter cited as Benedict); see also Virginia A. McDaniel, Recognizing Modern Maintenance and Cure as an Admiralty Right, 14 Fordham Int'l L.J. 669 (1991). The right terminates only when "maximum cure has been obtained". 1B Benedict Sec. 51, at 4-73 (footnote omitted). ²

Houma asserts that the district court erred (1) by holding that Energy's maintenance and cure reimbursement cross-claim survived Bertram's pre-trial settlements with all defendants; (2) by granting Energy recovery of the total medical costs it paid; (3) by finding Houma at fault; and (4) by requiring Houma to pay 50% of the maintenance and cure, rather than 20% (its apportioned fault). Needless to say, findings of fact are reviewed only for clear error, Fed.R.Civ.P. 52(a); e.g., Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985); conclusions of law are reviewed freely. E.g., Salve Regina College v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 1221, 113 L.Ed.2d 190 (1991).

A.

Whether Energy's maintenance and cure reimbursement claim against Houma was barred by Bertram's pre-trial settlements with all defendants is a legal issue, reviewed freely, that touches upon the trend in maritime law of apportioning fault. In essence, Houma contends that Fifth Circuit precedent on maintenance and cure reimbursement, especially Savoie v. Lafourche Boat Rentals, Inc., 627 F.2d 722 (5th Cir. Unit A 1980) (employer without fault), and Adams v. Texaco, Inc., 640 F.2d 618 (5th Cir.1981) (employer partly at fault), no longer control. This is addressed best by first retracing, in considerable detail, the steps that led to recovery over against a third-party tortfeasor for maintenance and cure. ³

1.

As reflected in the earlier brief discussion of maintenance and cure, the district court stated correctly that Energy, as Bertram's employer, owed him "an absolute, non-delegable duty" to provide maintenance and cure, regardless of Bertram's being at fault, and Energy being blameless. E.g., Davis v. Odeco, 18 F.3d at 1246 (owner of vessel "has a duty to pay maintenance and cure which is unrelated to any duty of care under tort law") (citing Adams, 640 F.2d at 620).

A seaman's right to maintenance and cure is implied in the employment contract between the seaman and shipowner. It "in no sense is predicated on the fault or negligence of the shipowner." Thus, an owner of a vessel is almost automatically liable [for maintenance and cure].

Brister v. A.W.I., Inc., 946 F.2d 350, 360 (5th Cir.1991) (footnote and internal citations omitted; quoting Aguilar v. Standard Oil Co. of New Jersey, 318 U.S. 724, 730, 63 S.Ct. 930, 934, 87 L.Ed. 1107 (1943)). In addition, the seaman's right to receive, and the shipowner's duty to pay, maintenance and cure is independent of any other source of recovery for the seaman (e.g., recovery for Jones Act claims). Brister, 946 F.2d at 361.

Although a seaman's negligence does not negate a shipowner's duty to pay maintenance and cure, the shipowner may recover those payments from a third-party whose negligence partially or wholly caused the seaman's injury. E.g., Savoie, 627 F.2d at 723 (even where seaman was partially responsible, it is "well-established" that employer may recover maintenance and cure costs) (citing Tri-State Oil Tool Indus., Inc. v. Delta Marine Drilling Co., 410 F.2d 178, 186 (5th Cir.1969)).

Our cases allowing such a recovery follow the holding of the landmark decision in Jones v. Waterman S.S. Corp., 155 F.2d 992, 997-1001 (3d Cir.1946). There, a seaman employed by Waterman was walking across the pier near his ship and fell into a ditch along a railroad siding owned by Reading. Id. at 994. He sued Reading, recovered damages from it, and executed a release in favor of it. Id. Thereafter, when the seaman sued Waterman for maintenance, cure, and wages, Waterman impleaded Reading for indemnity for any recovery by the seaman. Id. at 995.

The district court held that, the seaman having received a judgment against Reading, he could not maintain the action against Waterman, because a second judgment for the seaman could be a double recovery. Id. And, it refused to permit Waterman's cross-claim against Reading, on the theory set out in The Federal No. 2, 21 F.2d 313 (2d Cir.1927) (because maintenance and cure stems from contract between seaman and employer, employer cannot recover over against a third-party tortfeasor, absent a contractual or other legal relationship between employer and tortfeasor). ⁴ Id. The Third Circuit reversed, finding The Federal's reasoning inapposite. Waterman, 155 F.2d at 994, 1001.

In holding that the seaman could proceed against Waterman, and that Waterman could seek recovery over against Reading, the Third Circuit distinguished the seaman's claims against Reading for damages (sounding in tort), from his claims against Waterman for maintenance, cure, and lost wages (sounding in contract), stating:

[The seaman] could not have recovered maintenance and cure and wages from Reading, nor may he recover damages from Waterman. It follows that Waterman and Reading were not joint tortfeasors. In fact, Waterman committed no tort. It is not alleged that it did. Under no theory of law can [the seaman's] release to Reading release Waterman.

Id. at 996.

As for Waterman's claim against Reading, the court held:

It would seem to follow ... as a matter of logic that if the master by virtue of his contract ... with the servant is compelled to maintain and cure his servant ... the master...