G.I.K. v. Washington Group International
| Decision Date | 29 August 2007 |
| Docket Number | BRB 06-0983 |
| Parties | G.I.K. (Widow of K.H.K.), Claimant-Respondent v. WASHINGTON GROUP INTERNATIONAL and INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA/AIG WORLDSOURCE, Employer/Carrier- Petitioners |
| Court | Longshore Complaints Court of Appeals |
UNPUBLISHED OPINION
Appeals of the Decision and Order of Alexander Karst, Administrative Law Judge, United States Department of Labor.
Mun Su Park, Upper Tumon, Guam, for claimants.
Roger A. Levy and Michael T. Quinn (Laughlin, Falbo, Levy & Moresi LLP), San Francisco, California, for employer/carrier.
Before: DOLDER, Chief Administrative Appeals Judge, SMITH and HALL, Administrative Appeals Judges.
Employer Washington Group International (WGI), appeals the Decision and Order (2005-LHC-00027, 00028) of Administrative Law Judge Alexander Karst rendered on claims filed pursuant to the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. §901 et seq., as extended by the Defense Base Act, 42 U.S.C. §1651 et seq. (the DBA or Act). We must affirm the administrative law judge’s findings of fact and conclusions of law if they are rational, supported by substantial evidence, and in accordance with law. 33 U.S.C. §921(b)(3); O'Keeffe v. Smith, Hinchman & Grylls Associates, Inc., 380 U.S. 359 (1965).
K.H.K. and M.S.K. (the decedents), South Korean citizens, were killed while working for Ohm Electric (Ohm) in Iraq on November 30, 2003. [1] Ohm, a company incorporated in South Korea, was engaged in a partnership agreement with Shiloh International Group (Shiloh), a Philippine-based contractor, to provide personnel for the purpose of surveying power transmission lines and towers in Iraq. Shiloh, in turn, was a subcontractor of WGI, the prime contractor on a reconstruction project that was sponsored and administered by the United States Army Corps of Engineers. On December 15, and 16, 2003, the survivors of K.H.K. and M.S.K (claimants) respectively executed contracts with Ohm wherein its president, Mr. Seo, agreed to pay “consolation money” in exchange for the survivors’ agreement that they “shall no longer charge [Mr. Seo] of any civil or criminal liability [sic].” Decision and Order at 2. Specifically, M.S.K.’s surviving spouse and two daughters received 310, 000, 000 Korean Wan (roughly $310, 000), and K.H.K.’s surviving spouse received 235, 000, 000 Korean Wan (roughly $235, 000).
Claimants subsequently filed claims seeking benefits under the DBA. WGI did not dispute that claimants are entitled to death benefits under the DBA, but argued that claimants forfeited their rights to any compensation under the Act pursuant to Section 33(g) of the Act, 33 U.S.C. §933(g). [2] Alternatively, WGI argued that it is entitled to a credit under Sections 33(f), 3(e), or 14(j) of the Act, 33 U.S.C. §§933(f), 903(e), 914(j), for the payments claimants received from Ohm. The administrative law judge found that claimants’ claims are not barred by Section 33(g), and that employer is not entitled to a credit under Sections 33(f), 3(e), or 14(j) of the Act. He thus concluded, based on the parties’ stipulations, that claimants are entitled to death benefits, payable by WGI, pursuant to Section 9 of the Act, 33 U.S.C. §909.
On appeal, WGI challenges the administrative law judge’s characterization of the payments received by claimants from Ohm, and his consequent findings that Sections 33(g), 33(f), 3(e) and 14(j), are inapplicable. Claimants respond, urging affirmance.
WGI contends that the administrative law judge did not adequately address the nature of the payments which claimants received from Ohm. WGI first contends that it has met the requirements of Section 33(g), or alternatively Section 33(f), as the agreements in question, negotiated and executed without its prior knowledge or approval, explicitly state that the compensation was paid in order to release Ohm from liability for any further legal obligation.
Section 33(a), 33 U.S.C. §933(a), provides that if an injured employee “determines that some person other than the employer... is liable in damages” for the same disability or death, he need not elect between his compensation remedy and a third-party civil suit. Section 33 provides a method designed to foreclose the injured employee from receiving a double recovery by obtaining both benefits under the Act and civil damages from a successful negligence suit against a third party. Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 26 BRBS 49(CRT) (1992); see also Redmond v. Sea Ray Boats, 32 BRBS 1, vacated in part on other grounds, 32 BRBS 195 (1998). Thus, Section 33(f) provides a crediting for any recovery, and Section 33(g) bars a claimant’s entitlement to compensation under the Act where he enters into a settlement with a third party under Section 33(a) for an amount less than his compensation entitlement without obtaining employer’s prior written consent or obtains a settlement or judgment for an amount greater than or equal to his entitlement without notice to employer. 33 U.S.C. §933(f), (g) (1994); see Cowart, 505 U.S. at 409, 26 BRBS at 49(CRT); Redmond, 32 BRBS at 2.
In Redmond, a case cited by the administrative law judge, the claimant was injured while working at Sea Ray Boats (Sea Ray), where he had been sent through a temporary employment agency, Norrell Temporary Services (Norrell). Claimant filed a state workers’ compensation claim against Norrell and a claim for benefits under the Act against Sea Ray. Thereafter, claimant and Norrell settled the state claim without the prior approval of Sea Ray. The administrative law judge found that Sea Ray was liable for claimant’s benefits as a borrowing employer; however, she concluded that the Section 33(g) bar was applicable, as claimant settled a third-party claim with Norrell and did not obtain prior approval from Sea Ray. On appeal, the Board reversed the administrative law judge’s finding that the Section 33(g) bar was applicable, holding that the state workers’ compensation claim against Norrell was neither a third-party claim nor a suit for civil tort damages brought against a third party requiring employer’s prior approval. Rather, the claim was for state workers’ compensation benefits, see 33 U.S.C. §903(e), [3] and it was filed against claimant’s nominal employer, Norrell. [4] Redmond, 32 BRBS at 2.
Similarly, the administrative law judge found in this case that the payments made by Ohm to claimants do not fall within the provisions of Section 33 as they were not obtained from a third party as a result of a civil suit for tort damages. As in Redmond, the claimants obtained payments from an entity that was decedent’s employer. See generallyRedmond, 32 BRBS 1. It is undisputed in the instant case that Ohm was the decedents’ direct employer, and it therefore cannot be deemed a third party. Id. The fact that WGI is responsible for the payment of benefits in this case is wholly due to the failure of its subcontractors, Ohm and Shiloh, to secure the payment of compensation. See 33 U.S.C. §§904(a), 905(a); Arabie v. C.P.S. Staff Leasing, 28 BRBS 66 (1994), aff'd sub nom. Total Marine Servs., Inc. v. Director, OWCP, 87 F.3d 774, 30 BRBS 62(CRT), reh’g en banc denied, 99 F.3d 1137 (5th Cir. 1996). WGI’s liability cannot alter the employment relationship between Ohm and the decedents. Section 33 is premised on a suit in damages against a party “other than employer.” 33 U.S.C. §933(a). Thus, as it is undisputed that Ohm was decedents’ employer in this case, the payments made by Ohm to claimants cannot, as a matter of law, fall with the provisions of Section 33, as they were not received from a third party. As Section 33 as a whole is inapplicable, we affirm the administrative law judge’s findings that subsections (g) and (f) are also inapplicable. [5]
WGI asserts, in the alternative, that if Ohm is considered decedents’ employer, then it should be entitled to a credit under either Section 3(e) or Section 14(j). With regard to Section 3(e), employer contends that the amounts paid to the families by Ohm were in contemplation of its liability under the Korean workers’ compensation structure, as the payments made were precisely what would have been owed under that scheme.
Section 3(e) of the Act, 33 U.S.C. §903(e), provides an employer liable for benefits under the Act with a credit against disability or death benefits the claimant receives under another workers’ compensation law for the same injury. [6] See, e.g., D’Errico v. General Dynamics Corp. 996 F.2d 503, 27 BRBS 24(CRT) (1st Cir. 1993); Shafer v. General Dynamics Corp., 23 BRBS 212 (1990); see also Sun Ship, Inc. v. Pennsylvania, 447 U.S. 715, 12 BRBS 890 (1980). Based on the administrative law judge’s findings, which are supported by substantial evidence, the settlements between claimants and Ohm are not subject to the credit provision of Section 3(e). The administrative law judge found there is no credible evidence to establish that the payments made to claimants by Ohm were based on Korean, or “any other workers’ compensation law.” See 33 U.S.C. §903(e). The administrative law judge acknowledged that the testimony of Mr. Conklin and certain letters from Mr. Lee, the president of Shiloh, characterized these payments as having been “based on the Industrial Accident Compensation Insurance Act” of Korea. EX 11. He nevertheless rationally rejected this evidence as establishing that Section 3(e) applies, finding that employer did not establish that Mr. Conklin and/or Mr. Lee are qualified as experts on “workers’ compensation matters in Korea.” The administrative law judge also found that the fact that claimants unsuccessfully sought benefits under the Korean Industrial Accident Compensation Insurance Act after having received the payments from Ohm indicates that the amounts received in those...
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