Clausen v. Icicle Seafoods, Inc., 85200–6.

• Decision Date: 15 March 2012
• Docket Number: No. 85200–6.,85200–6.
• Citation: 2012 A.M.C. 660,272 P.3d 827,174 Wash.2d 70
• Court: Washington Supreme Court
• Parties: Dana CLAUSEN, Respondent, v. ICICLE SEAFOODS, INC., Appellant.

174 Wash.2d 70

2012 A.M.C. 660

272 P.3d 827

Dana CLAUSEN, Respondent,

v.ICICLE SEAFOODS, INC., Appellant.

No. 85200–6.

Supreme Court of Washington, En Banc.

Argued Sept. 15, 2011.Decided March 15, 2012.

Michael Alan Barcott, Megan Elizabeth Blomquist, Holmes Weddle & Barcott, Seattle, WA, Thaddeus O'Sullivan, K & L Gates, Spokane, WA, for Appellant.

Philip Albert Talmadge, Talmadge/Fitzpatrick, Tukwila, WA, James P. Jacobsen, Beard Stacey & Jacobsen LLP, Seattle, WA, Lawrence N. Curtis, Lafayette, LA, for Respondent.

Lincoln Dennis Sieler, Friedman § Rubin, Seattle, WA, David W. Robertson, The University of Texas at Austin, Austin, TX, amicus counsel for Inlandboatmen's Union of the Pacific.C. JOHNSON, J.

[174 Wash.2d 73] ¶ 1 This case involves a maritime claim for maintenance and cure and whether, under federal maritime law, a judge, instead of a jury, awards attorney fees following the jury award of compensatory and punitive damages in favor of an injured seaman against the employer for willful failure to pay maintenance and cure. This case also involves whether the jury's award for punitive damages must be limited and reduced under federal maritime law.

¶ 2 We hold that a judge determines and awards attorney fees in a maintenance and cure case and that the jury's punitive damage award for the willful withholding of maintenance and cure is not limited by federal maritime law cases. We affirm.

FACTS

¶ 3 Dana Clausen worked on board Icicle Seafoods' Bering Star as second engineer when he sustained his injuries. As an engineer, he performed various duties, including fixing machinery used aboard the vessel. In February 2006, Clausen suffered serious injury to his lower back, neck, and hand when he lifted a 122–pound piece of steel. After reporting the injury to Icicle, he went ashore in Alaska for initial medical care and was eventually sent home to Louisiana for further care.

¶ 4 Clausen encountered persistent difficulties in getting Icicle and its adjusting firm, Spartan, to meet its obligation to pay him maintenance and cure, traditional maritime remedies providing living and medical expenses, during his recovery. During this period, Clausen was unable to work due to his injuries. As part of its obligation to pay maintenance for Clausen's living expenses, Icicle paid Clausen $20 per day to cover lodging, utilities, and meals. Clausen resorted to living in a recreational vehicle with a leaking roof and with no heat, air conditioning, running water, or toilet facilities. Additionally, on its obligation to pay cure for Clausen's medical expenses, Icicle delayed or refused to pay for treatment that Clausen's doctors recommended.

¶ 5 In a May 2006 report to Icicle, Spartan confirmed that Clausen's injuries were likely career-ending and recommended that Icicle authorize settlement before Clausen secured legal representation. In a June 2006 letter, Clausen's doctor told Icicle that Clausen needed treatment by epidural spinal injections and was a candidate for back surgery. About a week later, an internal report recommended that Icicle meet face-to-face with Clausen to propose settlement. The June 2006 letter was never disclosed to Clausen.

¶ 6 In September 2007, Icicle filed suit in federal court against Clausen to terminate Clausen's right to maintenance and cure alleging that he impeded their right and obligation to investigate his claim. After the complaint was filed, Clausen hired counsel who issued subpoenas for Spartan's and his medical providers' records, which revealed that Icicle had extensively monitored and investigated the ongoing status of his condition.

¶ 7 Upon learning of Icicle's actions, Clausen filed the present action in King County Superior Court and Icicle's suit in federal court was dismissed. Clausen sought damages for Icicle's negligence under the Jones Act, 46 U.S.C. § 30104, unseaworthiness of the Bering Star, and wrongful withholding of maintenance and cure. The jury found Icicle negligent under the Jones Act, awarding Clausen $453,100 in damages. Clerk's Papers (CP) at 111–12. The jury also found that Icicle was callous or willful and wanton in its failure to pay maintenance and cure, awarding Clausen $37,420 in compensatory damages for maintenance and cure plus $1.3 million in punitive damages for Icicle's willful misconduct. CP at 108, 114.

[174 Wash.2d 75] ¶ 8 After the verdict, Clausen filed a posttrial motion requesting attorney fees. Icicle opposed the fee request by moving for judgment as a matter of law, arguing that under federal maritime law only the jury could award attorney fees. Icicle also argued for a reduction in the amount of attorney fees sought because Clausen's attorneys failed to keep contemporaneous time records, reducing the reliability and “reasonableness” of the hours claimed. The trial court denied Icicle's motion, ruling the attorney fees issue was for the court, not the jury; the court also noted Icicle took no issue with the amount of time spent on various tasks, making no claim that Clausen's attorneys wasted time or duplicated efforts. The court determined that under federal maritime law, Clausen could recover attorney fees and costs only for time spent on his maintenance and cure claim. Because Clausen's three claims were intertwined, making the hours spent on each claim difficult to segregate, the trial court reduced his total fees and costs by 10 percent and awarded $387,558.00 in fees and $40,547.57 in costs. CP at 432.

¶ 9 Icicle also filed a motion to amend the judgment challenging the jury's punitive damage award, which the trial court denied.

¶ 10 Icicle appealed. We granted Clausen's motion requesting transfer to this court due to the significant federal maritime law issues involved. Icicle assigns error to the award for attorney fees and to the punitive damages related to maintenance and cure. Icicle challenges the amount of the attorney fees award, and it argues that under federal maritime law (1) only the jury can award attorney fees as damages, and (2) punitive damages cannot exceed compensatory damages. We affirm the trial court.

ISSUES

¶ 11 1. Whether under general maritime law, the court and not the jury determines the amount of attorney fees related to the jury's punitive damage award for the employer's willful withholding of maintenance and cure.

¶ 12 2. Whether under general maritime law, punitive damages for willful withholding of maintenance and cure must be capped.

ANALYSIS

1. Attorney fees

¶ 13 The trial court concluded that the attorney fees issue in a maintenance and cure action was for the court, not the jury, and awarded fees and costs. Icicle contends the trial court erred because attorney fees are a form of punitive damages to be found by the jury. Icicle also objects to the amount of fees the trial court awarded. These issues involve both questions of law and review of discretionary orders by the trial court.

¶ 14 Maritime actions brought in state courts are governed by federal maritime law, both common law (referred to here as “general”) and statutory. Injured seamen do not qualify for state or federal worker compensation for on-the-job-injuries. RCW 51.12.100(1); 33 U.S.C. § 902(3)(G). Seamen, however, retain the right to sue for personal injury under the Jones Act. Additionally, under general maritime law, the injured seaman can seek an award for unpaid maintenance and cure. “Maintenance” is the living allowance for food and lodging while “cure” is the right to necessary medical services. Calmar S.S. Corp. v. Taylor, 303 U.S. 525, 528, 58 S.Ct. 651, 82 L.Ed. 993 (1938). A seaman is also entitled to unearned wages for the period from the onset of the injury or illness until the end of the voyage. The right to maintenance and cure extends to the point of maximum medical cure. Vaughan v. Atkinson, 369 U.S. 527, 531, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962).

¶ 15 The doctrine of maintenance and cure, an ancient right in British admiralty law, was introduced into American maritime law by Justice Story in Harden v. Gordon, 2 Mason 541, 11 F. Cas. 480, 482–83 (C.C.D.Me.1823). Justice Story expressed concern for seamen whose work made them vulnerable to sickness from climate, peril, and exhausting labor; who suffered away from home from disease, poverty, and lack of nourishment; and whose earnings were insufficient to provide for the expenses of their sickness. Subsequently, the United States Supreme Court recognized the right in The Osceola, 189 U.S. 158, 169, 23 S.Ct. 483, 47 L.Ed. 760 (1903). Since then, the Court has articulated that the underlying policy of maintenance and cure is (1) to protect the poor and improvident seaman from being abandoned while ill or injured in foreign ports, (2) to induce employers to protect the safety and health of seaman while in service, and (3) to induce employment in maritime service. Calmar, 303 U.S. at 528, 58 S.Ct. 651 (citing Harden, 11 F. Cas. 480).

¶ 16 Because maintenance and cure is a right created under common law, courts have fashioned equitable remedies to further the underlying policies. As to recovery of attorney fees, the United States Supreme Court recognized the remedy in Vaughan. In that case, the lower court had denied fees on the basis that the fees were not recoverable in a breach of contract suit. The United States Supreme Court reversed, recognizing that the duty to provide maintenance and cure was created at law, not by an employment contract. As a result, the Court held that while the failure of an employer to pay maintenance and cure gives rise to damages for the suffering and physical disability that followed, the recovery for those damages could also include “necessary expenses,” including counsel fees. The Court then emphasized that the employer's callous and willful behavior in withholding maintenance and cure forced the seaman to bring suit to recover what was plainly owed to him under the law. Vaughan, 369 U.S. at 531–33, 82 S.Ct. 997. Thus,...