Compton v. Alton S.S. Co., Inc.

• Decision Date: 05 October 1979
• Docket Number: No. 78-1569,78-1569
• Citation: 608 F.2d 96
• Parties: Walter L. COMPTON, Jr., Appellee, v. ALTON STEAMSHIP COMPANY, INC., Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 96

608 F.2d 96

Walter L. COMPTON, Jr., Appellee, v.ALTON STEAMSHIP COMPANY, INC., Appellant.

No. 78-1569.

United States Court of Appeals Fourth Circuit.

Argued May 10, 1979.

Decided Oct. 5, 1979.

John B. King, Norfolk, Va. (Walter B. Martin, Jr., Vandeventer, Black, Meredith & Martin, Norfolk, Va., on brief), for appellant.

Ralph Rabinowitz, Norfolk, Va.(Rabinowitz, Rafal & Swartz, Norfolk, Va., on brief), for appellee.

Before RUSSELL, Circuit Judge, FIELD, Senior Circuit Judge, and COPENHAVER, District Judge, for the Southern District of West Virginia, sitting by designation.

DONALD RUSSELL, Circuit Judge:

The plaintiff/appellee merchant seaman Compton signed on for a foreign voyage aboard the vessel SS TEX, owned by the defendant/appellantAlton Steamship Co., Inc. but under bareboat charter to Bulk Food Carriers.The foreign voyage terminated at Norfolk, Virginia, on April 14, 1976, at which time the plaintiff was paid all his earned wages and a certificate of discharge from foreign articles was duly entered by a United States Shipping Commissioner.¹The vessel then entered a shipyard at Norfolk for repairs and remained there until April 20.On that date the plaintiff returned to the vessel and was engaged for coastwise service.²The coastwise service ended on June 4, 1976.It seems agreed that the plaintiff was paid his wages for the period from April 20 to June 4, 1976.On October 25, 1976, the plaintiff, through his attorney, made demand on the defendant for payment of "wages plus room and meals allowances" for the six-day ³ period from April 14, 1976 to April 20, 1976, which was the period between the termination of the vessel's foreign voyage and the beginning of its coastwise voyage and the period when the vessel was laid up for repairs at the shipyard in Norfolk.

It was not until January 30, 1978, that the plaintiff filed this action against the defendant, seeking recovery for wages and fringe benefits for the period between April 14 and April 20, pursuant to his demand as made on October 25, 1976.In his complaint he stated the basis of his claim thus:

"According to the contract made for the benefit of the plaintiff between his union, the S.I.U. and Alton Steamship Co., Inc., the standard freight ship agreement, pursuant to Section 60 of said contract, plaintiff was owed wages plus room and meal allowances for the period of April 14, 1976 through April 20, 1976."

Paragraph 60 of the union contract, relied on by the plaintiff as the basis for his recovery in the action, provides that

"When a vessel is inactive in a United States port * * *.Should the vessel resume service within seven (7) days, the vessel's Unlicensed Personnel who return to the vessel, shall receive wages, room and meal allowances for the period for which they were laid off."

As explained by plaintiff's counsel at the May hearing, this provision gave the plaintiff a claim for wages, room and meal allowances for the period between April 14 and April 20, since "what happened here is that they(meaning the plaintiff and presumably other seamen) did return to the vessel within seven days and they're owed wages, meal allowance and room for that period."

In the prayer of his complaint, plaintiff requested recovery of the wages and fringe benefits "as provided by the above-mentioned contract (between the union and Alton) and additionally, plaintiff claims penalty wages as provided by the United States statutes, two for one, for every day * * * that defendant has refused and ignored, without just cause, payment of said wages * * *.Wherefore, plaintiff sues for total sum of FIVE THOUSAND DOLLARS ($5,000.00), his attorney's fees in reasonable sum herein, interest and any other amounts the Court may deem just."

The defendant Alton did not appear or answer the complaint within the stipulated time.Following request by the court of a status report by the parties, the plaintiff filed a motion for a default judgment.He gave notice of such motion to the defendant.The defendant not having appeared, default judgment on liability was taken on April 19, 1978 and hearing on damages was set for May 8, 1978.Notice of this later hearing on damages was given the defendant.Again, at this hearing on damages, the defendant was absent.In defendant's absence, the district judge proceeded to take testimony and to make a record on the damages rightfully due the plaintiff.The plaintiff testified and a number of official Coast Guard records were admitted as exhibits.The record thus made established that the plaintiff had terminated the foreign voyage under his articles on April 14 and was given an official certificate of discharge by a United States Shipping Commissioner attesting such.He was, also, paid all wages due him at the termination of such voyage.Thereafter, on April 20, he was "put back to work," for a coastwise voyage.Because within seven days after the termination of his foreign voyage, the vessel had "resume(d) service" and he had "return(ed) to the vessel,"he claimed a right to recover for the days between April 14 and April 20 under the union contract.The plaintiff testified that his daily wages on the vessel were $31.09, plus $21 for room and lodging, or a total of $52.09.Demand for payment of such wages for the period between April 14 and 20 was proved.

At this point in the hearing plaintiff's counsel asserted a right to recover penalty wages under § 596,46 U.S.C.It is obvious that the district judge and plaintiff's counsel were uncertain about the right, or at least, the extent of the right, of the plaintiff to recover for the penalty under Section 596.Both the district judge and plaintiff's counsel took no note at this hearing of the fact that, both under the allegations of the complaint itself and the testimony offered at the damages hearing by the plaintiff himself, the claim was for wages claimed under the union contract for the interim between two voyages, one foreign and the other coastwise, but proceeded under the incorrect assumption that Section 596 was applicable to any claim by a seaman for wages.They, however, were doubtful about the date from which statutory penalty wages could be assessed.They identified the two voyages involved, the first of which was declared to be a foreign voyage terminating on April 14 and the second a coastwise voyage terminating on June 4, 1976.Both the district judge and plaintiff's counsel agreed at this hearing that they would "Have to use the coastwise voyage because that was the period after the period we claim," and that the commencement date for calculating the penalty under Section 596 would be June 4, 1976, the termination date of the coastwise voyage.It is obvious from this exchange that neither the district judge nor plaintiff's counsel knew that coastwise voyages were without Section 596, under the specific exception in § 544,46 U.S.C.Plaintiff's counsel, however, somewhat demurred at the conclusion that the penalty wages should be computed from the termination of the coastwise voyage, telling the district judge "usually when you get double wage penalties, you get them from the date that there's an official demand.That just seems to be the practice."It was then agreed by the district judge and plaintiff's counsel to extend the penalty award from October 25, 1976, the date of demand, to the date of the hearing May 8, 1978.Following that formula, they fixed the number of days involved as 560 days.Using the formula of 560 X $104.18 (double the $52.09) wage claim with allowances) they calculated the proper damages due the plaintiff at $58,340.80.At this point the district judge expressed concern whether the award could include an allowance for room and board.He said the statute"just talks about wages" and inquired of counsel whether that included "room and board."Counsel replied that "(t)hey have traditionally been considered that way."⁴Partially reassured, the district judge said:

"I would guess so.All right.Well, I'm going to enter judgment for $58,340.80; and if the defendant thinks I'm wrong, they can move to vacate."

Both the district judge and plaintiff's counsel concluded the hearing with some humorous comments about the anticipated reaction of the defendant to the award.The district judge told the plaintiff's counsel that when the latter advised the defendant of the judgment he had "better stand back because they're going to fall over."

The award of a judgment of almost $60,000, based on an actual claim that would not exceed much over $300 at the most, did "shock"the defendant into action.It filed a motion promptly within ten days after judgment to set aside the judgment.When that was denied, it filed anew and this also was denied.In support of its motions, the defendant offered an excuse for its failure to appear.In this showing, it said that at the time when the claim involved in the action arose, its vessel SS TEX was under charter to Bulk Food Carriers, "whose responsibility it was to pay crew wages."Because any responsibility to pay plaintiff's claim was that of Bulk Food Carriers, the defendant, as it received any pleadings or notices of motion, forwarded them to Bulk Food Carriers and, without any contrary indication, assumed that Bulk Food Carriers was attending properly to the defense of the action.In order to supplement this claim of excusable neglect on its part, the defendant requested of the district court the opportunity to offer supporting evidence.It, also, alleged that the district court had necessarily entered the judgment as a penalty award under § 596 under a mistake of fact and law.It based this contention first on the fact that, contrary to the district court's assumption, the penalty provisions of § 596, which provided the statutory predicate for the district court's award, is inapplicable to "vessels engaged in coastwise trade with certain exception, none of which apply to the SS TEX" by §...