Newport Air Park, Inc. v. United States

• Decision Date: 04 December 1969
• Docket Number: No. 7317.,7317.
• Parties: NEWPORT AIR PARK, INC., Plaintiff, Appellee, v. UNITED STATES of America, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

419 F.2d 342 (1969)

NEWPORT AIR PARK, INC., Plaintiff, Appellee, v. UNITED STATES of America, Defendant, Appellant.

No. 7317.

United States Court of Appeals First Circuit.

December 4, 1969.

Alan S. Rosenthal, Atty., Dept. of Justice, with whom William D. Ruckelshaus, Asst. Atty. Gen., Edward P. Gallogly, U. S. Atty., and Daniel Joseph, Atty., Dept. of Justice, were on brief, for appellant.

Marsha E. Swiss, Washington, D. C., with whom Bruce G. Sundlun and Amram, Hahn & Sundlun, Washington, D. C., were on brief, for appellee.

Before ALDRICH, Chief Judge, McENTEE and COFFIN, Circuit Judges.

ALDRICH, Chief Judge.

Due to the negligence of appellant United States and appellee Newport Air Park, Inc., two airplanes collided at the Warwick, Rhode Island airport. Appellee settled the ensuing injury claims, and appellant, pursuant to a local statute requiring contribution,¹ reimbursed appellee to the extent of one-half of its outlay. This it did because the waiver contained in the Federal Tort Claims Act, FTCA, extends to claims for contribution when the government is a joint tortfeasor. United States v. Yellow Cab Co., 1951, 340 U.S. 543, 71 S.Ct. 399, 95 L.Ed. 523.² The government made one exception, which has resulted in the present lawsuit. One of the persons killed by the collision was a government employee. The government's obligation to its employees is under the Federal Employees' Compensation Act, FECA, 5 U.S.C. § 8101 et seq., a statute antedating the FTCA, and similar in content to state workmen's compensation acts.³ Section 16(c) of the FECA provides that this is its sole obligation.⁴ The government discharged this liability by paying the widow $8,600. Thereafter the widow sued appellee, and recovered $50,000 by way of settlement. As required by section 32 of the FECA,⁵ the widow then repaid the $8,600 to the government. Appellee demanded contribution by the government to the extent of $8,600.⁶ Citing section 16(c), the government refused. The parties having stipulated to the above facts, the court granted judgment for the appellee, 293 F.Supp. 809, and the government appeals.

Basically it is appellee's position that the limitation contained in section 16(c) has the purpose of restricting recovery by the employee and his representatives, and is not directed at rights of unrelated third parties. The issue is not that simple. The inquiry must be, what right is appellee seeking to enforce.

It is clear that if appellee's claim to reimbursement were a strictly independent right, personal to appellee, section 16(c) would not bar such recovery. Weyerhaeuser S.S. Co. v. United States, 1963, 372 U.S. 597, 83 S.Ct. 926, 10 L.Ed. 2d 1. There a private shipowner, whose vessel collided with a government vessel, brought suit in admiralty. A cross libel was filed. Finding both to blame, the court divided the damages. The government, asserting that section 16(c) was a bar to its further liability, objected to the court's including in the gross damages the amount that Weyerhaeuser was required to pay a government employee injured in the collision. The Court rejected this contention, saying, at p. 601, 83 S.Ct. at p. 929,

"The purpose of § 7(b), added to the FECA in 1949, was to establish that, as between the Government on the one hand and its employees and their representatives or dependents on the other, the statutory remedy was to be exclusive. There is no evidence whatever that Congress was concerned with the rights of unrelated third parties, much less of any purpose to disturb settled doctrines of admiralty law affecting the mutual rights and liabilities of private shipowners in collision cases."

Appellee cannot take all the comfort from Weyerhaeuser that it might wish. While the result there was to include in the damages to be divided between the parties what Weyerhaeuser had to pay the government employee, Weyerhaeuser had a direct right of action against the government because of the collision with its vessel. The Court held that section 16(c) of the FECA did not bar the inclusion of Weyerhaeuser's tort liability to the government employee as part of its consequential damages. The resultant division of damages was not contribution, but was in accordance with the admiralty rule of reduced recovery when there is contributory negligence.

The decision below is not supported by Weyerhaeuser, and is inconsistent therewith. The court awarded Weyerhaeuser one-half of what it was required to pay to the government employee, a sum substantially greater than the compensation payment under the FECA. See 9 Cir., 294 F.2d 179. If the Weyerhaeuser principle applied to the case at bar, appellee should recover $25,000, not $8,600. Neither the court below, nor the cases upon which it relied, nor even appellee (see n. 6, supra) makes that contention.

While on the subject of consistency, we might add that the court's award of $8,600 is inconsistent with the basic concept of contribution, which is sharing, not payment in full. On appellee's theory, that the government's liability of $8,600 was occasioned by joint negligence, it would seem that the obligation should be divided between them. Instead, the government has been made to pay as much as if the negligence had been solely its own. The court's reasoning, 293 F.Supp. at 815, seemingly that the government should pay one-half of the $50,000, but that "limitless contribution would probably compel a complete reconsideration of the actuarial basis of compensation insurance," while supported by a dictum in Elston v. Industrial Lift Truck Co., Inc., 1966, 420 Pa. 97, 216 A.2d 318, and in accord with the Pennsylvania rule as there summarized, seems impermissible ad hoc legislation.⁷ Either the government owes $4,300, or, conceivably, $25,000, or it owes nothing.

Although appellee mistakes the effect of Weyerhaeuser, the government places too much reliance upon Pope & Talbot, Inc. v. Hawn, 1953, 346 U.S. 406, 74 S.Ct. 202, 98 L.Ed. 143. There the combined negligence of a stevedore and a shipowner resulted in injury to an employee of the stevedore. In the Longshoremen's and Harbor Workers' Compensation Act there are exclusivity and recoupment provisions comparable to the pertinent section of the FECA. The stevedore paid compensation under the Longshoremen's Act to the injured worker, who then sued the shipowner. The latter demanded that its accountability for damages to the worker be reduced by the amount of the stevedore's payment, and that the stevedore, because of its negligence, be forbidden to recoup from the employee — in effect what is being sought here. Otherwise, it argued, the stevedore would be profiting from its own lack of care. The Court refused, holding that the statutory scheme for workmen's compensation would be violated by such a result.⁸

The government fails to note the absence in Pope & Talbot of any statute providing for contribution. The ship owner sought to create rights merely from the fact that it was making a payment which benefited the negligent stevedore. This was a circular argument. If the shipowner had prevailed, in whole or in part, the stevedore would, in effect, have been indemnifying the shipowner for its own negligence, contrary to Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp., 1952, 342 U.S. 282, 72 S.Ct. 277, 96 L.Ed. 318. The circumstances that the shipowner's payment ultimately benefited the stevedore was res inter alios. The latter's payment to its employee had nothing to do with negligence, but was contractual indemnity.

An injured party's insurance does not redound to lessen the liability of the third party who caused the injury. Had the stevedore in Pope & Talbot been an ordinary insurer that had contracted with the employee, the shipowner would have received no benefit from, or credit on account of, the compensation payment. Bangor & A. R. Co. v. Jones, 1 Cir., 1929, 36 F.2d 886; Parmiter v. United States, D.Mass., 1948, 75 F.Supp. 823; Note, Unreason in the Law of Damages: The Collateral Source Rule, 77 Harv.L. Rev. 741 (1964); Rest. Torts § 920, Comment e. Correspondingly, the fact that the employee here had agreed with the government to make a refund in certain circumstances was none of the shipowner's concern.⁹

We must, accordingly, determine whether the right of contribution as between joint tortfeasors calls for a different result. We think not. We reach this result not by application of rubric — whether the government was a joint tortfeasor or not — because stating the question in such manner tends to assume the point, but by considering the nature of the right of contribution. Contribution does not create direct liability in tort, each towards the other, between two tortfeasors. Rather, as the word implies, it is a right based upon equitable fairness. The right to have the other tortfeasor contribute to his outlay arises in whichever tortfeasor satisfies the loss. It is inequitable that as between two parties jointly liable the ultimate loss should be fortuitously determined by the injured party's choice of defendant. Gregory, Contribution Among Joint Tortfeasors: A Defense, 54 Harv.L.Rev. 1170 (1941); Leflar, Contribution and Indemnity Between Tortfeasors, 81 U.Pa. L.Rev. 131, 137 (1932); Note, Toward a Workable Rule of Contribution in the Federal Courts, 65 Colum.L.Rev. 123, 125 n. 19 (1965).

As a matter of legal principle the route to contribution must be via subrogation or assignment based upon payment.¹⁰ In such circumstances we would suppose that there would be nothing to be subrogated to if the other party claimed to be a joint tortfeasor, was never under liability to the injured party. Nor do we readily see any unfairness, so far as the non-liable party is concerned, for he, by hypothesis, receives no benefit from the satisfaction of the other actor's liability. Some courts, nevertheless, have found unfairness unless the immune party contributes, without, however, explaining where the unfairness lies....