Vaughan v. Atkinson

• Decision Date: 06 June 1961
• Docket Number: No. 8269.,8269.
• Citation: 291 F.2d 813
• Parties: Clifford VAUGHAN, Appellant, v. N. J. ATKINSON, a non-resident, individually, and as Master; National Shipping & Trading Corporation, and American Waterways Corporation, both foreign corporations, as owners and/or operators of THE American S.S. NATIONAL LIBERTY, Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

291 F.2d 813 (1961)

Clifford VAUGHAN, Appellant, v. N. J. ATKINSON, a non-resident, individually, and as Master; National Shipping & Trading Corporation, and American Waterways Corporation, both foreign corporations, as owners and/or operators of THE American S.S. NATIONAL LIBERTY, Appellees.

No. 8269.

United States Court of Appeals Fourth Circuit.

Argued April 4, 1961.

Decided June 6, 1961.

Burt M. Morewitz, Newport News, Va., for appellant.

Walter B. Martin, Jr., Norfolk, Va. (Vandeventer, Black, Meredith & Martin, Norfolk, Va., on brief), for appellee American Waterways Corporation.

Before SOBELOFF, Chief Judge, and SOPER and BOREMAN, Circuit Judges.

SOPER, Circuit Judge.

This appeal challenges the ruling of the District Judge in an admiralty case that the amount due a seaman for maintenance should be offset by his earnings during the period of his illness.

There is no dispute as to the facts. Clifford Vaughan served as seaman on the S.S. National Liberty, an American ship, from November 26, 1956 to March 2, 1957, when he was discharged at Norfolk, Virginia, upon the termination of the voyage. On January 5, 1959, he filed a libel against the ship and its owners claiming damages on two causes of action: First, that through the unseaworthiness of the vessel and negligence of the defendants he had contracted tuberculosis and, second, that he was entitled to maintenance and cure until he recovered from his illness. The first cause of action was decided against the seaman and on this appeal we are concerned only with the second cause of action.

Upon his discharge from the ship the libellant was furnished by the master with a certificate entitling him to treatment at the Public Health Service Hospital. He entered the hospital and was given treatment and was discharged as an out-patient on June 6, 1957, and continued in that status until August 25, 1959, when he was notified that he was fit for duty. The owners of the ship paid nothing to the libellant for maintenance prior to the institution of the suit. The District Judge held that this was a dereliction of duty owed to the libellant and ordered the respondents to pay maintenance at $8 per day with interest from June 6, 1957, when the libellant became an out-patient, until he was declared fit for duty on August 25, 1959. The judge found, however, that the libellant had suffered no physical or mental injury from the failure of the respondents to furnish maintenance and that the libellant had actually earned more by driving a taxicab during his out-patient status than he had earned before signing on the vessel. Upon these facts the judge held that the libellant was not entitled to additional damages by reason of the ship's delinquency and that the amount due him for maintenance should be offset by his earnings during the interval.¹

This conclusion was in accord with recognized authority. It was held in Wilson v. United States, 2 Cir., 229 F.2d 277, that the right to maintenance and cure lies on the border line between "contract" and "quasi contract" and is sufficiently contractual so that the seaman has the duty to mitigate damages. This decision was followed by the same court in Perez v. Suwanee S.S. Co., 239 F.2d 180, where the amount found by the court to be due to a seaman for maintenance was reduced by the amount of his earnings during the period of his incapacity.

There is nothing in the decision of the Second Circuit in Reardon v. California Tanker Co., 260 F.2d 369, on which the libellant relies on this appeal, at variance with these holdings. In that case the seaman brought suit under the Jones Act, 46 U.S.C.A. § 688, for personal injuries sustained while serving on the defendant's vessel. In the District Court defendant's counsel offered to prove that the defendant had paid the plaintiff the sum of $576.00 (at the rate of $8.00 per day) for maintenance and cure which exceeded his actual expenses for these purposes. The defendant's contention was that the excess should be credited against any award to the seaman for lost earnings. The court held that the evidence was inadmissible and instructed the jury that the plaintiff was entitled to recover for loss of wages and pain and suffering resulting from the injury but not for the cost of his room and board during the period of convalescence. On appeal it was first held that the trial court was in error in rejecting the proffered evidence, but subsequently on reargument before the full court this decision was reversed on the ground that the amount of $8.00 per day for this item had been fixed by agreement between the parties and neither party could repudiate it. It is plain that this decision did not overrule the previous decisions of the same court in the Wilson and Perez cases, supra. On the contrary, the final decision in Reardon expressly approved the view set forth by Judge Medina in his dissent to the original opinion wherein he expressly approved the decision in the Perez case and said that, in deducting the amount of the earnings from the award of maintenance in that case, the court did no more than reaffirm the well settled principle that the purpose of maintenance and cure is to make the seaman whole and that if what he earns is added to the allowance he will get something more than he is entitled to.²

Although the seaman in the instant case suffered no damages from the failure of the respondent to pay maintenance until ordered to do so by the court, he was obliged to pay attorney's fees in the prosecution of the suit. On this account he urges that he should be allowed an amount to cover this expense in the judgment of the court. There is, however, no authority for such procedure. The general rule is that in suits for breach of contract counsel fees may be allowed to the plaintiff if he can show that defendant's breach of contract has caused litigation against third parties in which the plaintiff has been obliged to secure the services of counsel, but the rule does not deal with attorney's fees paid by the plaintiff in his suit against the defendant himself for breach of contract. 5 Corbin on Contracts § 1037; Restatement of Contracts, Vol. 1, § 334; 15 Am.Jur., Damages, § 142; McGaw v. Acker, Merrall & Condit Co., 111 Md. 153, 160, 73 A. 731. It was early held that counsel fees are not allowable to the gaining side in admiralty beyond the costs and fees fixed by statute. The Baltimore, 8 Wall. 377, 392, 19 L.Ed. 463; Tullock v. Mulvane, 184 U.S. 497, 511, 22 S.Ct. 372, 46 L.Ed. 657.

Affirmed.

SOBELOFF, Chief Judge (dissenting).

Even more than the result in the immediate case, the tendency of the court's decision and its potential impact upon future cases give me concern. The holding carries ominous implications for the future of the ancient right of maintenance and cure.

Reliance is placed upon two decisions in the Second Circuit which are inconsistent with each other and which, in any event, fail to apply the proper standard in determining the right to maintenance and cure. For reasons to be stated, I prefer the rule announced by the Third Circuit in Yates v. Dann, D.C.Del. 1954, 124 F.Supp. 125, affirmed on this point 3 Cir., 1955, 223 F.2d 64.

We are dealing here with no abstract question, but with a legal issue arising upon judicially established facts. We begin with the District Court's unchallenged finding that from June 6, 1957, when Vaughan was discharged as an inpatient of the United States Public Health Service Hospital and given outpatient status, until August 25, 1959, when he was pronounced fit for duty, he was entitled to maintenance. The owner was duly notified and it is undisputed that a copy of the hospital record was sent by registered mail to its insurance carrier. Whether the plaintiff was suffering from active tuberculosis, as suspected, was not definitely determined, but the significant finding of the District Court was that "he undoubtedly had a condition which required treatment."

The validity of this explicit finding which is the basis of the seaman's claim for maintenance was at no time contested. It has not been suggested that maximum recovery was attained earlier than August, 1959, the date adopted by the District Court, nor is it asserted that the plaintiff was earlier fit to perform seaman's duties. Nevertheless the shipowner, who knew of the man's condition, simply withheld payments for maintenance for this long period, as well as the shorter period from March 7, 1957, to March 17, 1957, when also Vaughan was an out-patient. The District Court adjudged that in so withholding all maintenance the shipowner was derelict in its duty to the seaman. Neither in the District Court nor here was any attempt made to defend or justify this dereliction, but a reduction in the amount of maintenance was sought and obtained by the owner on account of Vaughan's earnings as a taxicab driver during the many months of his conceded need for treatment and incapacity for seaman's duty. It is noteworthy that the amounts earned from the operation of the taxi in no week equalled either the wages which Vaughan earned as a seaman or the contractually fixed maintenance allowance.

The only penalty the owner suffers for this callous violation of its duty is that 6% interest has been added to the accumulated liability. By contrast, the effect of the shipowner's withholding of payments and forcing court action, has been to subject the plaintiff to substantial expense for counsel fees.¹ This circumstance is disregarded in making the award. Also, as the afflicted plaintiff was unable to demonstrate and calibrate the effect of his being compelled under economic pressure to sustain himself by part-time taxi driving, no claim for aggravation of his condition has been asserted against the employer for delaying the payments due.²

We have not been cited precedents authorizing reimbursement for even reasonable counsel fees, and not even in a case like this where the consequence of...