Said v. Rouge Steel Co., Docket No. 149367

• Decision Date: 06 March 1995
• Docket Number: Docket No. 149367
• Citation: 209 Mich.App. 150,530 N.W.2d 765
• Parties: Mohsein SAID, Plaintiff-Appellant, v. ROUGE STEEL COMPANY, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 765

530 N.W.2d 765

209 Mich.App. 150

Mohsein SAID, Plaintiff-Appellant, v. ROUGE STEEL COMPANY, Defendant-Appellee.

Docket No. 149367.

Court of Appeals of Michigan.

Submitted March 9, 1994, at Detroit.

Decided March 6, 1995, at 9:20 a.m.

Released for Publication April 17, 1995.

O'Bryan Law Center, P.C. by Harold A. Perakis, Birmingham, for plaintiff.

Foster, Meadows & Ballard, P.C. by John L. Foster and Paul A. Kettunen, Detroit, for defendant.

Before WHITE, P.J., and MICHAEL J. KELLY and CAPRATHE, ^* JJ.

WHITE, Presiding Judge.

Plaintiff appeals as of right the dismissal of his claim against defendant for maintenance and cure. We affirm in part, reverse in part, and remand.

On November 4, 1986, plaintiff was injured while employed as a crewman aboard the vessel M/V Henry Ford II, owned and operated by defendant. On January 20, 1987, plaintiff filed suit in federal district court, alleging negligence under the Jones Act, 46 App.U.S.C. § 688, and unseaworthiness under general admiralty and maritime law, as well as a claim for maintenance and cure. The case was mediated, and both parties accepted the $500,000 evaluation. On April 25, 1988, judgment was entered accordingly, awarding plaintiff $500,000 nunc pro tunc to March 1, 1988.

On April 21, 1988, plaintiff sent defendant a letter stating:

Insofar as Judgment is Nunc Pro Tunc to March 1, 1988, maintenance is owing therefrom. Please bring this up to date.

Apparently, there was no further correspondence.

On June 17, 1991, plaintiff filed another claim for maintenance and cure in the Wayne Circuit Court. Defendant's answer pleaded numerous affirmative defenses, among them that plaintiff's claim was barred by the statute of limitations, by laches, by collateral estoppel and res judicata, and by the rule against double recovery. Defendant requested that the claim be dismissed.

In response, plaintiff argued that his claim was not barred by the three-year statute of limitations set forth in 46 USC 763a because the claim sounds in contract, rather than tort, and, therefore, the six-year state statute of limitations for contract claims, M.C.L. § 600.5807; M.S.A. § 27A.5807, is applicable. Regarding laches, plaintiff argued that maintenance and cure is an ongoing obligation, and that failure to pay it gives rise to a right of action not only for the benefits, but also for any aggravation of the original condition caused by the failure to pay. Plaintiff also argued that the defenses of collateral estoppel, res judicata, and double recovery do not apply because the obligation to furnish maintenance and cure continues after a judgment, and can give rise to serial suits for benefits as they come due; the earlier judgment of $500,000 applied only to maintenance and cure due on March 1, 1988, and the instant claim is for maintenance and cure after that time and for aggravation resulting from defendant's failure to pay.

At the hearing on defendant's motion, the circuit court granted summary disposition, stating only, "If there was ever a frivolous case filed, that has to be it." Plaintiff now appeals, arguing that while the circuit court did not specify the grounds on which it granted defendant's motion, none of the grounds argued before the court was a proper basis for dismissal.

I

We first address the statute of limitations issue. As he did below, plaintiff argues that Michigan's six-year statute of limitations for contract claims, M.C.L. § 600.5807; M.S.A. § 27A.5807, applies rather than the three-year limitation set forth in 46 App.U.S.C. § 763a for maritime torts. Plaintiff relies on Reed v. American Steamship Co., 682 F.Supp. 333 (E.D.Mich., 1988) for support, citing it as binding precedent.

In Reed, the federal district court addressed a claim for unearned wages as "part of a broader claim for maintenance and cure." Id. at 336. It concluded that suits for maintenance and cure were not affected by 46 App.U.S.C. § 763a, but, rather, were subject to the doctrine of laches. The court based its conclusion on its review of the statute's legislative history, on the persuasive reasoning of a leading treatise on admiralty law, ¹ and on the essential nature of claims for maintenance and cure, which it described as "mutable," having characteristics of both contract and tort claims. Id. at 336-338. Observing that maintenance and cure claims, particularly those for unearned wages, are "clearly distinct" from claims for damages for personal injury or death in that they arise from a contractual employment relationship, the court concluded that the analogous state statute of limitations for contracts should be looked to in determining the applicable period for laches. Id. at 338. The court also pointed out that a claim for failure to furnish cure would, by contrast, be a personal injury claim subject to § 763a. Id. The court relied on the following passage from the treatise:

Maintenance and cure suits are not affected by the Uniform Statute of Limitations for Maritime Torts. Maintenance and cure is contractual in nature and a continuing obligation. However, the failure to furnish cure is a personal injury which gives rise to a tort remedy and therefore is subject to the three year limitation period.

The doctrine of laches applies in maintenance and cure suits. Generally, a state statute of limitations applicable to a similar injury on land may by analogy furnish a suitable yardstick to determine what constitutes laches. [Norris, The Law of Seamen, § 26:43 (1985).]

In Oliver v. Nat'l Gypsum Co., 187 Mich.App. 610, 468 N.W.2d 312 (1991), a case involving a wrongful death claim, this Court took an approach very similar to, and informed by, the decision in Reed. As did the Reed court, this Court held that the doctrine of laches is to be used to judge the timeliness of a claim for maintenance and cure. Oliver, supra at 615, 468 N.W.2d 312. However, while recognizing that such a claim is contractual in nature, arising out of the employment relationship, id. at 615, 468 N.W.2d 312, this Court also stated:

Still, because the occasion to assert a claim for maintenance and cure is a personal injury, and the claim is usually appended to Jones Act and unseaworthiness claims, it is appropriate to use the three-year limitation period of § 763a as a standard to evaluate a laches defense. [Id. at 616, 468 N.W.2d 312.]

The Court of Appeals for the Sixth Circuit has not addressed the issue. ² It is Oliver rather than Reed that serves as binding precedent. See Ogletree v. Local 79, SEIU AFL-CIO, 141 Mich.App. 738, 750, 368 N.W.2d 882 (1985).

I conclude, therefore, that plaintiff's argument for a six-year limitation period based on M.C.L. § 600.5807; M.S.A. § 27A.5807 must fail. The timeliness of plaintiff's action is to be judged under the doctrine of laches, using the three-year limitation period as a yardstick. Under this standard, I conclude that the trial court did not err in dismissing plaintiff's claim for maintenance and cure arising from the original accident. Defendant asserted that plaintiff took no action and made no claim for maintenance or cure at any time between April 1988, when the letter was sent and the federal court judgment was entered, ³ and June 1991, when the instant complaint was filed. Plaintiff did not deny this or otherwise assert that he had good reason for the delay in filing this action. ⁴

This does not, however, address plaintiff's argument, supported by case law, ⁵ that maintenance and cure is an ongoing obligation, and that failure to pay it gives rise to a right of action not only for the benefits, but also for any aggravation of the original condition arising from the failure to pay, as an additional cause of action, giving plaintiff a viable claim for aggravation occurring during the three years before the filing of the suit. The circuit court did not acknowledge or address this issue. We reverse the court's grant of summary disposition with respect to this claim and remand for further proceedings. In order to recover for aggravation, plaintiff must establish that he was entitled to additional maintenance and cure during this time, that defendant failed to pay it, and that plaintiff's condition was aggravated as a result of the failure to pay.

II

Because plaintiff's claim for aggravation due to a failure to provide continuing maintenance and cure is dependent on a showing that maintenance and cure was owing during the relevant period, we must address defendant's assertion that any right to continued maintenance and cure after the entry of judgment in the federal court case is barred by res judicata, collateral estoppel, or the rule against double recovery.

Maintenance and cure is designed to provide a seaman with food and lodging (maintenance) and medical costs (cure) when the seaman becomes sick or injured in the ship's service. Vaughan v. Atkinson, 369 U.S. 527, 531, 82 S.Ct. 997, 1000, 8 L.Ed.2d 88 (1962). Recovery is not based on fault, is analogous to worker's compensation, and takes the form of a per diem living allowance and payment of medical costs. Oliver, supra at 613, 468 N.W.2d 312, quoting Szopko v. Kinsman Marine Transit Co., 426 Mich. 653, 657-658, 397 N.W.2d 171 (1986). Maintenance and cure is not intended to confer lifetime benefits. Farrell v. United States, 336 U.S. 511, 515, 69 S.Ct. 707, 709, 93 L.Ed. 850 (1949). However, it covers not only the period during which the seaman is incapacitated from doing the seaman's work, but continues until the seaman reaches maximum medical recovery. Vaughan, supra. Maximum medical recovery means "until the sick or injured person has been cured, or incapacity has been declared of a permanent character." ⁶ Farrell, supra at 517, 69 S.Ct. at 710.

Because payments for maintenance and cure are intentionally limited to the time needed for recovery, Farrell, supra, lump sums in anticipation of a continuing need or for an indefinite period are inappropriate, although an...