Milstead v. Diamond M Offshore, Inc.

• Decision Date: 02 July 1996
• Citation: 676 So.2d 89
• Parties: 95-2446 La
• Court: Louisiana Supreme Court

Page 89

676 So.2d 89

95-2446 La. 7/2/96, 1996 A.M.C. 2431

Edward D. MILSTEAD v. DIAMOND M OFFSHORE, INC., et al.

No. 95-C-2446.

Supreme Court of Louisiana.

July 2, 1996.

Cliffe Edward Laborde, III, Dean A. Cole, Laborde & Neuner; for Applicant.

Elwood C. Stevens, Jr., John W. Lee, Jr., Kleinpeter, Schwartzberg & Stevens; for Respondent.

[95-2446 La. 1] VICTORY, Justice. ^*

We granted certiorari in this maritime personal injury case to resolve a conflict among the circuits regarding the standard of appellate review to be applied when reviewing admiralty cases decided in state courts under the "saving to suitors" clause and under the Jones Act, and to address the appropriateness of awarding prejudgment interest on future damages. We find that the federal principles of appellate review are not binding upon our state courts in the exercise of concurrent maritime jurisdiction, and that Louisiana's manifest error standard of review controls. We further find that federal law clearly precludes the award of prejudgment interest on future damages, including future lost earnings and future pain and suffering.

FACTS & PROCEDURAL HISTORY

In 1992, Edward D. Milstead worked as a floor hand on a semi-submersible offshore derrick, called the New Era, which was owned and operated by his employer, Diamond Offshore, Inc. and Diamond M-ODECO Offshore, Inc. ¹ On September 8, 1992, Milstead was injured while assisting his fellow crewmen in [95-2446 La. 2] performing a routine "cutting and slipping" operation, which consists of removing and replacing worn drill line from the drill block that moves up and down in the derrick. The task is achieved by attaching new drill line to an air hoist and lifting it from the drill floor into the derrick, whereupon it is thread through the drill block and onto large spools.

Tommy Hale, the driller supervising the "cutting and slipping" operation, assigned Milstead the responsibility of preventing the drill line from rubbing certain hydraulic hoses as it was being lifted. In order to accomplish this task, Milstead climbed onto the motor shed which is located approximately 12-15 feet above the drill floor and is surrounded by a double handrail. As the drill line was raised, Milstead leaned over the rail and pulled it away from the hoses with his hand. He continued to do this intermittently, each time leaning farther over the handrail as the drill line was hoisted higher into the derrick. Eventually, the drill line was raised to a point beyond Milstead's reach. He then extended his torso through the top and bottom handrails, sat on the bottom handrail, and crossed his legs around the bottom of one of the vertical posts. From this position, Milstead was able to lean well past the handrail to reach the drill line with his right hand while holding on with his left hand. While leaning in this manner, the drill line came loose from the air hoist and fell striking Milstead's hard hat and causing him to fall backwards to the floor of the motor shed. As a result, he sustained injuries to his knees, neck, back and head.

On June 11, 1993, Milstead filed suit in state court against Diamond M under general maritime law and the Jones Act, 46 U.S.C. 688 et seq. The defendant's liability was predicated upon the alleged unseaworthiness of the vessel; failure to provide the plaintiff with a safe working environment; failure to enforce proper and [95-2446 La. 3] safe rules of seamanship and supervision; and failure to take appropriate means or precautions for the plaintiff's safety.

Following a bench trial, the defendant was found liable under general maritime law as owner of the vessel, and under the Jones Act as the plaintiff's employer. In its reasons for judgment, the trial court concluded that the defendant breached its duty to the plaintiff by failing to train him to keep the drill line off of the hydraulic hose, and by failing to provide him with the proper equipment to do so (e.g., a hook or rope). The trial court acknowledged the plaintiff's corresponding obligation to perform his duties in a non-negligent manner. However, it assigned no comparative fault to the plaintiff, concluding that extension of his upper body between the handrails and failure to wear a safety harness in violation of company policy did not contribute to his injuries.

The trial court held that as a result of the accident Milstead aggravated a preexisting knee injury, sustained injuries to his lower back, neck and head, and that he suffers severe psychological injury as a result of the physical pain and trauma. The trial court further concluded that these injuries will plague the plaintiff for the rest of his life, and that he will not be able to return to gainful employment. Based upon these findings, the plaintiff was awarded: $150,000.00 for past and future physical pain and suffering; $150,000.00 for past and future mental pain and suffering; and $953,536.40 for past and future economic loss. The trial court further found that the defendant owed $10,084.95 in past medical expenses, that the plaintiff had not reached maximum medical cure and that the defendant was obligated to continue providing cure until that time. Prejudgment interest was awarded on each of these sums from the date of judicial demand.

[95-2446 La. 4] The plaintiff's claims for penalties and attorney's fees based upon the defendant's alleged arbitrariness and capriciousness in the failure to pay cure were denied upon the trial court's finding that appropriate delay for investigative purposes occurred. Additionally, the plaintiff's claims for punitive damages on the general maritime claim were denied.

The defendant and the plaintiff both appealed to the Louisiana Third Circuit Court of Appeal. Milstead v. Diamond M Offshore, Inc., 94-1582 (La.App. 3d Cir. 9/6/95), 663 So.2d 137. The defendant argued that the trial court erred in the following respects: (1) by finding that the plaintiff was unable to return to work; (2) by adopting the economic report of plaintiff's expert without providing any reason for rejecting the opinions of the defendant's economist; (3) by failing to assign comparative fault to the plaintiff; (4) by failing to address the extent of the aggravation of the plaintiff's preexisting knee condition and how it affected the damage award; and (5) by awarding prejudgment interest on the awards for future damages. The plaintiff contended that the trial court erred in failing to award future medical expenses and punitive damages.

Before addressing the parties' specific assignments of error, the court of appeal first determined that Louisiana's manifest error standard of appellate review, and not federal standards of appellate review, should be employed when examining state court suits instituted under the Jones Act and general maritime law. Applying that standard, the court of appeal affirmed the trial court's judgment in all respects, except to amend it to reflect the trial court's ruling that the defendant was obligated to continue paying cure.

With regard to the issue of prejudgment interest, the court of appeal acknowledged that the U.S. Fifth Circuit Court of Appeal has held that prejudgment [95-2446 La. 5] interest cannot be awarded on future damages. Milstead, 94-1582 at p. 22, 663 So.2d at 149, citing Brister v. A.W.I., Inc., 949 F.2d 1160 (5th Cir.1991); Martin v. Walk, Haydel & Associates, Inc., 794 F.2d 209 (5th Cir.1986); Williams v. Reading & Bates Drilling Co., 750 F.2d 487 (5th Cir.1985). However, the court of appeal further acknowledged that there is disagreement within the third circuit regarding the application of this rule of law, and that in some cases the circuit has affirmed awards of prejudgment interest on future economic losses, including future lost earnings. Milstead, 94-1582 at p. 22-23, 663 So.2d at 150, citing McFarland v. Justiss Oil Co., Inc., 526 So.2d 1206 (La.App. 3d Cir.1988); Babineaux v. Lykes Bros. S.S. Co., Inc., 608 So.2d 659 (La.App. 3d Cir.1992), writ denied, 610 So.2d 819 (La.1993); Gray v. Texaco, Inc., 610 So.2d 1090 (La.App. 3d Cir.1992), writs denied, 616 So.2d 686, 687 (La.1993). Relying on this line of third circuit cases, the court of appeal affirmed the trial court's award of prejudgment interest on all of the damages, past and future.

STANDARD OF APPELLATE REVIEW

Whether an admiralty case tried in state court should be reviewed under state or federal standards of appellate review has received much attention from Louisiana's courts of appeal in recent years. Many of the circuits have decided the issue differently, obviating this Court's final resolution of the conflict. ²

[95-2446 La. 6] To appreciate the struggle faced by the courts of appeal, it is important to understand the sources from which both state and federal courts derive their subject matter jurisdiction in maritime cases. As a general proposition, maritime law in the United States is federal law. American Dredging Co. v. Miller, 510 U.S. 443, 445-46, 114 S.Ct. 981, 984, 127 L.Ed.2d 285 (1994); THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW, § 4-1 (2d ed.1994); Thomas C. Galligan & Jean Paul P. Overton, Developments in the Law 1994-1994: A Faculty Symposium, 55 La.L.Rev. 469 (1995). This proposition is based upon Article III, § 2, cl. 1 of the United States Constitution, which provides that the federal judicial power "shall extend ... to all Cases of admiralty and maritime Jurisdiction." See also 28 U.S.C. § 1333(1).

Notwithstanding, federal-court jurisdiction over maritime cases has not been entirely exclusive. American Dredging, Co., supra. Section 1333(1) of Title 28 of the United States Code, which is the successor to the Judiciary Act of 1789, bestows upon the federal district courts "original jurisdiction, exclusive of the courts of the States," of admiralty and maritime cases, "saving to suitors in all cases all other remedies to which they are otherwise entitled." The emphasized language, [95-2446 La. 7]...