Nelson v. Victory Electric Works, Inc.

• Citation: 227 F. Supp. 404
• Decision Date: 10 March 1964
• Docket Number: Civ. A. No. 13716.
• Parties: Joseph NELSON and Robert Minor Smith v. VICTORY ELECTRIC WORKS, INC.
• Court: U.S. District Court — District of Maryland

227 F. Supp. 404

Joseph NELSON and Robert Minor Smith v. VICTORY ELECTRIC WORKS, INC.

Civ. A. No. 13716.

United States District Court D. Maryland.

March 10, 1964.

I. Irwin Bolotin and Philip J. Lesser, Lesser & Lesser, Kensington, Md., for plaintiffs.

John A. Beck and John J. Pyne, Bethesda, Md., for defendants.

R. DORSEY WATKINS, District Judge.

This is a suit by the plaintiffs (hereinafter Nelson and Smith) against the defendant, their employer (hereinafter Victory) to recover moneys allegedly due and to become due under the provisions of a collective bargaining agreement entered into on June 25, 1959 between United Brotherhood of Carpenters and Joiners of America (hereinafter Union) and Victory. This agreement provided that Victory would "carry an excess compensation policy on his employees when they are working outside of the District of Columbia which shall give the employees * * * additional compensation in Maryland and Virginia equal to that of the District of Columbia."

The underlying facts have all been stipulated.

Nelson and Smith, while employed by Victory and while working for Victory, sustained accidental personal injuries arising out of and in the course of their employment. Each received an award from the State Industrial Accident Commission, under which (to October 29, 1963):

Nelson had received under the Maryland Award:

                Temporary total disability          $ 880.00
                Temporary partial disability          200.00
                Permanent partial disability        1,875.00
                                                    ________
                                                                $2,955.00
                

Under the District of Columbia Compensation Act, his compensation would have been:

                Temporary total disability        $1,188.00
                Temporary partial disability         200.00
                Permanent partial disability
                ($15.00 a week from April 25
                 1961 to October 29, 1963)         1,965.00
                                                  _________
                                                               $3,353.00
                

Plus "excess benefits" payable at $15.00 per week, or $780.00 per year, until a total of $17,280 is paid. Nelson is fifty-eight years old and has a life expectancy of nineteen years, or $14,280 based on life expectancy.

Smith had received under the Maryland award:

                Temporary total disability        $  640.00
                Permanent partial disability       3,125.00
                                                 ___________
                                                               $3,765.00
                

Under the District of Columbia Compensation Act, his compensation would have been:

                Temporary total disability        $  864.00
                Permanent partial disability
                ($25.00 per week from November
                21, 1960 to October 29
                1963)                              3,825.00
                                                  _________
                                                               $4,689.00
                

Plus "excess benefits" payable at $25.00 per week, or $1,300.00 per year, until a total of $17,280.00 is paid. Smith is forty-six years old and has a life expectancy of twenty-seven years.

Jurisdiction is based upon diversity of citizenship, Nelson and Smith being residents and citizens of the District of Columbia, and Victory being a corporation with its principal place of business in Louisiana, but which had been doing business in Maryland. The "contract" allegedly involved related to performance within the State of Maryland. It is alleged that the amount in controversy, as to each of Nelson and Smith, exceeds $10,000, exclusive of interests and costs.

Service was purportedly made upon Victory through the State Department of Assessment and Taxation of the State of Maryland. Victory moved to dismiss on the ground that at the time suit was instituted Victory had ceased to do business in the State of Maryland. The motion was denied by Judge Edward S. Northrop, on the basis of Chief Judge Roszel C. Thomsen's opinion in L'Hereux v. Central American Airways Flying Service, Inc., D.Md.1962, 209 F.Supp. 713, and on the ground of waiver, with both of which opinions this judge is in accord.

Victory then answered, raising as defenses that if there were an agreement as alleged, it was contrary to Article 101, section 52¹ of the Maryland Code of Public General Laws; and that the Union agreement, if executed, was not binding upon it.

1. Section 51 provides in pertinent part as follows:

"No employer or employee who is subject to the provisions of this article shall exempt himself from the burden or waive the benefit of this article by any contract, agreement, rule or regulation, and any such contract, agreement, rule or regulation shall be pro tanto void."

The argument in substance is that one of the benefits of Article 101 to the employer is the provision of section 15 that the liability to pay compensation according to the schedules "is exclusive." However, section 51 would not appear to prevent the employer, by agreement independent of, and outside of the provisions of Article 101 from complementing or supplementing the Compensation Act as to the total sums recoverable or receivable.²

The dictum, if not the express holding, in Baltimore Transit Company v. Harroll, 1958, 217 Md. 169, 141 A.2d 912, strongly supports the position of Nelson and Smith. In the Harroll case an employee had sought to recover medical and hospital expenses allegedly payable under the terms of a collective bargaining agreement, and prevailed in the lower court. In reversing, the Court of Appeals held that where plaintiff had first received compensation benefits, then settled his claim against the negligent third party, out of which settlement the insurer of the employer had been repaid the compensation, plus the amount of hospital and doctor's bills it had paid plaintiff, he could not recover the hospital and doctor's bills on the theory that such medical care had been furnished under the terms of a collective bargaining agreement. The court said (217 Md. at 177, 141 A.2d at 916):

"We cannot read Article 17 as requiring the company to pay over to an employee the hospital and medical expenses it has received from a tortfeasor. If the parties had so intended and had clearly expressed that intent, they could have agreed that any such expenses recouped by the employer and made his by the statute, must be given by him to the injured employee, but the provisions of Article 17 fall far short of such an agreement, as we read them."

However, the court recognized the validity of the supplementation of benefits under the Act, saying (217 Md. at 173-174, 141 A.2d at 914):

"There are significant indications that Article 17 of the agreement was to complement the compensation act and not to supplement or supplant it in any respect. It would be entirely competent for the parties by express contract to supplement the benefits under the Act or to relax its restrictions or requirements in favor of the employees. 2 Larson, Workmen's Compensation Law, Sec. 97.61; Sharp v. Foley Brothers, Sup., 69 N.Y.S.2d 514."

The Harroll case is construed as follows in 23 M.L.E. Workmen's Compensation § 181:

"Accordingly, as a general rule, an employee may not, by an agreement, waive rights given under the Act, or waive a claim for compensation before the disability takes place. However, it is entirely competent for an employer and an employee by express contract to supplement benefits under the Act or to relax its restrictions or requirements in favor of the employee."

The first defense is accordingly without merit.

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