Delaware River & Bay Authority v. Kopacz

• Decision Date: 25 September 2009
• Docket Number: No. 08-4086.,No. 08-4029.,08-4029.,08-4086.
• Citation: 584 F.3d 622
• Parties: DELAWARE RIVER & BAY AUTHORITY, Appellant in No. 08-4029 v. Jan D. KOPACZ, Appellant in No. 08-4086.
• Court: U.S. Court of Appeals — Third Circuit

584 F.3d 622

DELAWARE RIVER & BAY AUTHORITY, Appellant in No. 08-4029 v. Jan D. KOPACZ, Appellant in No. 08-4086.

No. 08-4029.

No. 08-4086.

United States Court of Appeals, Third Circuit.

Argued May 21, 2009.

Filed September 25, 2009.

Mary E. Reeves, Esq. [Argued], Donna Adelsberger & Associates, Glenside, PA, for Appellant/Cross Appellee.

E. Alfred Smith, Esq. [Argued], E. Alfred Smith & Associates, Wayne, PA, for Appellee/Cross Appellant.

Before: RENDELL, STAPLETON and ALARCÓN^*, Circuit Judges.

OPINION OF THE COURT

RENDELL, Circuit Judge.

In this appeal from the District Court's award of declaratory judgment in favor of defendant Jan Kopacz, and against plaintiff Delaware River & Bay Authority ("DRBA"), we are called upon to decide two issues of admiralty law: (1) whether commuter seamen, who eat and sleep on land, are entitled to "maintenance and cure"—payment from a shipowner to a seaman to cover medical, food, and lodging expenses during the seaman's recovery from illness or injury; and (2) if so, whether a shipowner is relieved of its maintenance and cure obligation when the injured seaman receives Social Security disability benefits and long-term disability payments provided by the shipowner. Relying on our opinions in Barnes v. Andover Company, L.P., 900 F.2d 630 (3d Cir.1990), and Shaw v. Ohio River Company, 526 F.2d 193 (3d Cir.1975), the District Court concluded that commuter seamen are entitled to maintenance and cure, independent of other benefits paid to the seaman. Accordingly, the District Court awarded Kopacz maintenance of $50,790.00, plus prejudgment interest of $2,204.29, but denied Kopacz's claim for consequential damages, including lost wages, pain and suffering, and attorney's fees and costs. Both parties timely appealed.

DRBA's central contention on appeal is that payment of maintenance would produce a "double recovery," because Kopacz's wages already enabled him to procure food and housing on land, and because Social Security disability and long-term disability payments made to Kopacz adequately covered his living expenses. DRBA argues, further, that the award of prejudgment interest was punitive and thus impermissible. The sole argument advanced in Kopacz's cross-appeal is that consequential damages were improperly denied. Finding no error in the District Court's thoughtful resolution of these issues, we will affirm its order.

I. Background

Maintenance is the payment by a shipowner to a sailor for the sailor's food and lodging costs incurred while he is ashore as a result of illness or accident. Barnes, 900 F.2d at 631. A common law remedy, maintenance, derived from medieval maritime codes, was incorporated into American jurisprudence nearly two centuries ago. Harden v. Gordon, 11 F.Cas. 480, 482-83 (C.C.D.Me.1823) (No. 6,047); see The Osceola, 189 U.S. 158, 175, 23 S.Ct. 483, 47 L.Ed. 760 (1903). Its original purpose was clear and compelling—to ensure injured seamen funds adequate to cover basic living expenses during their recovery. The imposition of such a duty, it was felt, would benefit both shipowners and seamen, by encouraging shipowners to implement appropriate safeguards to protect sailors, and by encouraging seamen to undertake hazardous voyages:

Seamen are by the peculiarity of their lives liable to sudden sickness from change of climate, exposure to perils, and exhausting labour. They are generally poor and friendless, and acquire habits of gross indulgence, carelessness, and improvidence. If some provision be not made for them in sickness at the expense of the ship, they must often in foreign ports suffer the accumulated evils of disease, and poverty, and sometimes perish from the want of suitable nourishment.... If these expenses are a charge upon the ship, the interest of the owner will be immediately connected with that of the seamen. The master will watch over their health with vigilance and fidelity.... Even the merchant himself derives an ultimate benefit from what may seem at first an onerous charge. It encourages seamen to engage in perilous voyages with more promptitude, and at lower wages. It diminishes the temptation to plunderage upon the approach of sickness; and urges the seamen to encounter hazards in the ship's service, from which they might otherwise be disposed to withdraw.

Barnes, 900 F.2d at 633 (quoting Harden, 11 F.Cas. at 483).

Since Harden was decided almost 200 years ago, the lot of the "poor and friendless" seaman has improved considerably. As we noted in Barnes, union contracts may guarantee sailors a host of benefits, including overtime and premium pay, vacation allowances, disability pensions, and various amenities, including televisions and washers and dryers. 900 F.2d at 637. The emergence of these contractually-guaranteed benefits, however, has not diminished our historic solicitude toward seamen, who continue to be viewed by the law as "wards of the admiralty." Id. at 636-37. Accordingly, maintenance, a duty that is "annexed to the employment contract," that "attaches once the seaman enters the service of the ship," and that "no private agreement is competent to abrogate," has retained its vitality in the modern era. Id. at 636.

DRBA guarantees many of the benefits discussed above to its seamen. The interaction of these benefits and the maintenance obligation lies at the heart of this appeal.

A permanent full-time employee of DRBA who suffers an injury on the job is entitled to full wages for the first 90 days of disability. Thereafter, the employee is entitled to benefits equivalent to 60% of his wages, which are paid through a long-term disability ("LTD") policy funded wholly by DRBA, and administered by Hartford Insurance Company ("Hartford").¹ The personnel manual provided to Kopacz sets forth the purpose of LTD benefits—to "provide a continuing income should the employee's ability to earn a living be interrupted or terminated by a prolonged disability." A. 6-7.

The duty to provide LTD benefits stems from a provision in the collective bargaining agreement between DRBA and its marine employees, providing that, "Employer agrees to continue to provide all permanent full-time employees long-term disability plans that are offered to ... employees generally." A. 7. The agreement makes no mention of maintenance payments, and DRBA does not maintain an insurance policy specifically to cover its maintenance obligation to seamen.

In the event of a delay in the payment of LTD benefits, an injured sailor also receives the value of his sick and annual leave. According to DRBA's risk manager, Bonnie Miller, the payment of annual leave is distinct from maintenance and is merely a stop-gap to enable an injured seaman to cover his living expenses during the pendency of his LTD application.

Kopacz suffered a debilitating back injury in December 2004 and was subsequently deemed unfit to return to duty by DRBA. As a full-time permanent employee, Kopacz received his full wages for 90 days following the date of his disability, equivalent to approximately $9,900. Kopacz also received the value of his sick and annual leave, equivalent to approximately $4,600. Thereafter, Hartford paid Kopacz monthly LTD benefits of $2,192 for 17 months, beginning in April 2005 and ending in September 2006.² DRBA did not make separate maintenance payments to Kopacz, nor did Kopacz request them.

Because Hartford also required injured seamen to apply for Social Security disability ("SSD") benefits, which, if approved, would be deducted from monthly LTD benefits, Kopacz submitted an application for SSD benefits in October 2006. After approval of Kopacz's application, the Social Security Administration transmitted a check to him in the amount of $17,142.00, representing his total benefits retroactive to July 2005, and thereafter provided monthly payments of $1,167.00.

Upon discovering the payment of $17,142.00, Hartford demanded reimbursement of slightly less than this sum³ and advised Kopacz that his LTD benefit would thereafter be reduced by the amount of his monthly SSD payment. After Kopacz refused to reimburse Hartford, it suspended payment of LTD benefits. Shortly thereafter, Kopacz advised DRBA that it, not he, was required to reimburse Hartford for this sum; when DRBA declined to do so, this suit followed.

DRBA sued Kopacz in the United States District Court for the District of Delaware, seeking a declaratory judgment that DRBA did not owe Kopacz maintenance and cure. After a one-day bench trial, the District Court concluded that Kopacz was entitled to maintenance in the amount of $50,790.00, plus prejudgment interest of $2,204.29. However, the District Court denied Kopacz's claim for consequential damages, including lost wages, pain and suffering, and attorney's fees and costs.⁴ Both parties timely appealed.⁵

DRBA contends that commuter seamen, who eat and sleep ashore, are ineligible for maintenance. It also argues, in the alternative, that the District Court should have deducted other payments made to Kopacz, including LTD and SSD, from the amount of maintenance owed to Kopacz—a result that, DRBA maintains, is necessary to avoid double recovery. Further, DRBA contends that the award of prejudgment was punitive, rather than compensatory, and thus impermissible. Kopacz's cross-appeal urges that the District Court improperly denied his claim for consequential damages.

II. Discussion

A. Commuter Seamen

DRBA asks the Court to adopt a per se rule denying maintenance to commuter seamen. DRBA observes that the rationale for maintenance—to provide seamen compensation equivalent to food and lodging received at sea—is inapplicable to commuter seamen, who eat and sleep ashore. DRBA argues, further, that the wages of commuter seamen are already computed with the expectation that they will pay for their own food and housing expenses on land and, therefore, an award of maintenance would produce an unjustified windfall. DRBA maintains that, based on these...