Vaughan v. Atkinson

• Decision Date: 24 July 1962
• Docket Number: No. 480.,480.
• Citation: 206 F. Supp. 575
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Clifford VAUGHAN, Libellant, v. N. J. ATKINSON et al., Respondents.

206 F. Supp. 575

Clifford VAUGHAN, Libellant, v. N. J. ATKINSON et al., Respondents.

No. 480.

United States District Court E. D. Virginia, Newport News Division.

July 24, 1962.

J. L. Morewitz, Burt M. Morewitz, Newport News, Va., for libellant.

Walter B. Martin, Jr., (Vandeventer, Black, Meredith & Martin) Norfolk, Va., for respondents.

WALTER E. HOFFMAN, Chief Judge.

Subsequent to the decision of the Supreme Court of the United States, 369 U.S. 527, 82 S.Ct. 997, 8 L.Ed.2d 88, this case was heard on remand to determine the amount of damages to be assessed against the respondents.

As this court interprets the language of the Supreme Court, the intent and purpose of the same is that the trial court should make the seaman "whole", i. e., he should not be required to pay money out of his pocket to collect maintenance lawfully due to him. To accomplish this fact, the respondents are required to pay, by way of damages, a reasonable attorney's fee to libellant's proctor for prosecuting the proceedings made necessary to collect the seaman's maintenance claim. Additionally, libellant is entitled to recover such proper items of expense as libellant would ordinarily incur in connection with the litigation to the extent that it applies to the maintenance claim.

It is abundantly clear from the opinions of the Supreme Court and the Court of Appeals for the Fourth Circuit, 291 F.2d 813, that damages by way of attorney's fees must be reasonable. Footnotes contained in each opinion carry this positive implication.

The respondents contend that damages by way of attorney's fees should be limited to a fair and reasonable fee on that portion of the maintenance concerning which there was no bona fide excuse for not paying and, as to the remainder, no damages should be permitted.

Proctors for libellant, relying upon the final paragraph of the dissenting opinion by Mr. Justice Stewart, urge that exemplary damages should be awarded without regard to the contractual arrangement between libellant and his proctors. They argue that they have successfully established a novel point in the admiralty field and, accordingly, punitive damages should be awarded upon a quantum meruit basis. They have produced some evidence tending to suggest that their services are worth a minimum of $12,000.00 and a maximum of $17,000.00.

We do not read the majority opinion of the Supreme Court as suggesting that punitive damages are in order. Applied to this case, we conclude that the Supreme Court has directed the trial court to fix such damages by way of reasonable attorney's fees as may have been sustained by the libellant in order to collect his maintenance which should have been voluntarily paid to him by the shipowner.

Initially the Court entered an interlocutory decree for maintenance at the rate of $8.00 per day from June 6, 1957, to February 18, 1959. The court subsequently allowed as a credit the amount earned by libellant as a taxi driver while he was still not completely cured. This ruling was reversed by the Supreme Court.

In June, 1959, respondents paid the sum of $2,207.82 to libellant, from which amount libellant's proctors deducted one-half by way of attorney's fees. Subsequently, for maintenance incurred following the date of the interlocutory decree, respondents forwarded checks in the amount of $179.83 and $186.06 which were subjected to a deduction of 50% for attorney's fees. Proctors for libellant are now holding — and intend to present for payment — checks in the sums of $92.23 and $120.27. These checks, proctors for libellant say, will also be subject to attorney's fees on the basis of the contractual arrangement. The respondents also paid $150.00 as interest on the delinquent payments aforesaid, which was subject to an attorney's fee, and $27.50 covering taxable court costs.

Proctors now agree that, as of July 10, 1962, when this matter was heard, the balance due by way of maintenance — which is the same as the libellant earned during the period that he was entitled to maintenance — is $3,743.69. To this figure there must be added the sum of $889.06 by way of interest at 6% per annum for each week's maintenance unpaid or a total amount due in the sum of $4,632.85. Proctors for libellant agree that as to any damages allowed by way of attorney's fees, no charge can be made, as the libellant would never be made "whole" under such an arrangement.

Respondents argue that their unwillingness to pay maintenance during the period the libellant worked as a taxi driver constituted a bona fide defense under the decisions from the Second Circuit, Wilson v. United States, 229 F.2d 277, and Perez v. Suwanee S.S. Co., 2 Cir., 239 F.2d 180. Whatever merit this argument may have under a different set of facts, it cannot be successfully applied here in light of the opinion of the Supreme Court and the uncontroverted fact that respondents never attempted to pay any sum to libellant prior to the institution of suit. True, after the institution of the litigation it appeared that respondents had a bona fide defense to a portion of libellant's claim for maintenance under what appeared to be the controlling authority, but the present contention that respondents should not be required to pay damages on the sum of $4,632.85 is untenable because of the lack of good faith on the part of respondents from the inception of the claim for maintenance.

This court does not construe the Supreme Court opinion as automatically requiring the payment of damages by way of attorney's fees in all cases where maintenance claims are presented. There may be valid reasons for not voluntarily paying a claim for maintenance — as long as the shipowner acts equitably with a bona fide desire to comply with the law and provide maintenance which is justly and obviously due, damages by reason of an honest dispute will not necessarily be allowable.

This brings us to a consideration of the quantum of attorney's fees to be allowed by way of damages. One of the proctors for libellant has testified that a 50% contingent fee contract is standard in most seamen's cases....