Candado Stevedoring Corporation v. Lowe, 409.
| Decision Date | 03 August 1936 |
| Docket Number | No. 409.,409. |
| Citation | 85 F.2d 119 |
| Parties | CANDADO STEVEDORING CORPORATION v. LOWE, Deputy Com'r. |
| Court | U.S. Court of Appeals — Second Circuit |
Edwin M. Bourke, of New York City, for complainant-appellant.
Leo J. Hickey, U. S. Atty., of Brooklyn, N. Y. (Vine H. Smith and Clarence Wilson, Asst. U. S. Attys., both of Brooklyn, N. Y., of counsel), for deputy-commissioner-appellee.
Samuel Stern, of New York City, for claimant-appellee Pietro Angelo.
Before L. HAND, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
Pietro Angelo, hereinafter called the "claimant," was injured while employed as a stevedore on the barge Loretta by Candado Stevedoring Corporation, hereinafter called the "employer." He filed a claim for compensation, pursuant to the provisions of the Longshoremen's and Harbor Workers' Compensation Act (33 U.S.C.A. § 901 et seq.), was awarded compensation thereunder, and, in addition, the 20 per cent. penalty provided by section 14 (f) of the act (33 U.S.C.A. § 914 (f). The employer was a self-insurer.
At the time the claimant was injured the Loretta was owned by Ira S. Bushey & Sons, Inc., and was under charter hire to the Seaboard-Great Lakes Corporation. Soon after the accident he filed with the Compensation Commission a notice of election to sue a third party or parties and thereupon brought an action against Ira S. Bushey & Sons, Inc., for $45,000 damages arising from the negligence of the latter, in that one of the hatch covers of the barge had a defective cleat. He did not make Seaboard-Great Lakes Corporation a party defendant, as he was not then aware of the charter. Ira S. Bushey & Sons, Inc., then filed a petition to limit liability, the claimant answered the petition, but subsequently defaulted in the limitation proceeding, whereupon the court took an inquest and found that the owner was entitled to limit liability and that the accident was wholly due to the negligence of Angelo. This resulted in a decree on May 14, 1934, in the limitation proceeding noting the default and exonerating the owner of the barge from liability. On July 31, 1934, the result of the third party action against Ira S. Bushey & Sons, Inc., was known to United States Protective & Indemnity Agency, which was the partial indemnitor of the employer in workmen's compensation matters, and on or before that day, the employer had been informed that the claimant had requested to have his claim for compensation placed on the commissioner's calendar for hearing and that he would take no further steps in the third party action against Ira S. Bushey & Sons, Inc.
In November, 1934, hearings began before the deputy commissioner in the compensation proceeding, and on May 13, 1935, compensation was awarded to the claimant up to April 9, 1935, in the sum of $2,447.50 with weekly payments thereafter of $17.50. A few days after the award was made, the employer brought the present suit under section 21 of the Longshoremen's Act (33 U.S.C.A. § 921) to set aside the award and restrain its enforcement and moved for a temporary injunction pursuant to section 21 (b), 33 U.S.C.A. § 921 (b), which was denied. The employer did not pay the award. Accordingly, on July 16, 1935, the deputy commissioner made a supplemental order, pursuant to section 14 (f), 33 U.S. C.A. § 914 (f), declaring the amount of the default, which had increased to $2,692.50 because of the accrual of the weekly sums since the date of the original award and imposing a penalty of 20 per cent., or $538.50, under section 14 (f) of the act. After this supplemental order was made, the District Court granted a temporary injunction against the payment of the penalty. Inasmuch as payment of the $2,692.50 due on the award proper without the penalty had not been stayed, that sum was collected from the employer by an execution levied by the United States marshal. At the final hearing, Judge Moscowitz ordered the complaint dismissed, and from the decree entered on his decision this appeal was taken.
The appellant contends that the claimant has forfeited his right to compensation by voluntarily defaulting in the limitation proceeding. In American Lumbermen's Mutual Casualty Co. v. Lowe, 70 F.(2d) 616, 618, we held that the mere institution and subsequent discontinuance of a third party action does not constitute a final election, and that "some prejudice to the employer * * * from the discontinuance of the action ought to be shown in order to render the initial election unalterable."
It is true that in the foregoing case the claimant discontinued his action against the third party before proceeding to seek compensation and it was the institution of the action against a third party, followed by its discontinuance, that we held insufficient to constitute a final election. The reason, however, that these acts did not amount to such an election was because no prejudice to the right of subrogation ever arose. And we were of the clear opinion that nothing which did not prevent the employer from effectively exercising that right should deprive the claimant of compensation. The claimant in the case at bar was found by the court in the limitation proceeding to have had no cause of action against Ira S. Bushey & Sons, Inc., of the slightest value. But if the employer was really dissatisfied with the failure of the claimant to pursue his claim and offer evidence, it had about two weeks within which it might move to open the default under the local rule. We cannot suppose that the court would deny relief if the claim had real merit. As it was the employer made no attempt to preserve his alleged right and seemed to prefer to assume that a valuable claim against the third party had been willfully abandoned, rather than to make any attempt to open the default and litigate the claim or to prove its worth in the present suit. We think it important to have the right of workmen to compensation treated in a liberal spirit and only denied where some injustice or injury to the employer appears. The right of the employee should not be defeated by mere technicalities. Accordingly, we hold that the bill to nullify the decision of the deputy commissioner was properly dismissed. The question remains whether the penalty assessed by the deputy commissioner was contrary to law.
Section 14 (f) of the act (33 U.S.C.A. § 914 (f) provides: ...
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