ANCIENT DUTIES, MODERN
PERSPECTIVES:
RECENT DEVELOPMENTS IN
THE LAW OF MAINTENANCE
AND CURE
Kimbley A. Kearney
Thomas J. Bethune, IV
Clausen Miller P.C.
Blessey Marine Services, Inc.
Louise S. Livingston
Francis J. Barry, Jr.
Thomas Miller (Americas), Inc.
Moderator
Deutsch, Kerrigan & Stiles
1
MAINTENANCE AND CURE –
AN ANCIENT DUTY REVISITED
A vessel owner’s liability for the
maintenance, cure and wages
of “a seaman [who] falls sick,
or is wounded, in the service of
the ship” derives from “ancient
Codes” of the sea,
“promulgated as far back as
1200 A.D.”
2
In modern times, the seaman’s lot has
“improved considerably.”
Nevertheless, a seaman’s entitlement
to maintenance and cure has been
diligently guarded by the courts.
3
Today, we will consider:
• Recent decisions interpreting the rights and duties of
seamen and vessel owners in the maintenance and cure
arena;
• What the cases reveal about the scope of the duty of the
vessel owner today; and
• The perils of breaching that duty.
4
DAMAGES AVAILABLE TO THE SEAMAN
WHEN THE VESSEL OWNER GETS IT WRONG
THE RULE
Unreasonable failure to pay maintenance and cure exposes the ship owner
to liability for damages for “‘the aggravation of the seaman’s condition,
determined by the usual principles applied in tort cases to measure
compensatory damages.’” Atlantic Sounding Co., Inc. v. Townsend (2009)
5
WHAT MUST BE SHOWN
Prolonged pain and suffering or mental anguish is insufficient
without showing actual aggravation of the injury.
Weeks Marine, Inc. v. Garza (Texas 2013):
• Jury award of $2.5 million for aggravation of a seaman’s injury
overturned for insufficient evidence to establish proximate
causation.
• Delay in surgery and prolonged recovery were attributable to the
physician’s conservative treatment plan, not the vessel owner’s
failure to pay.
6
MORE RULES
Townsend instructs that punitive damages for the
“willful and wanton disregard of the maintenance and
cure obligation” remain available.
Attorney’s fees are recoverable by a seaman whose
maintenance and cure benefits are withheld “in bad faith,
callously, or unreasonably.”
7
INVESTIGATING THE MAINTENANCE AND CURE CLAIM –
THE STARTING POINT FOR DEFEATING THE CLAIM OR
INCREASING EXPOSURE FOR DAMAGES
THE RULE
Failure to conduct any
investigation into a seaman’s
maintenance and cure claim is
the kind of “callous,” “willful
and persistent” conduct that
can give rise to the imposition
of punitive damages.
8
Mai v. American Seafoods Co.
(Wash. Ct. App. 2011)
EXAMPLES of such conduct include:
• Laxness in investigating a claim;
• Termination of benefits in response to the
seaman’s retention of counsel or refusal of a
settlement offer; and
• Failure to reinstate benefits after diagnosis of
an ailment previously not determined
medically.”’
9
The Vessel Owner Has The Right To Require The
Seaman To Establish Prima Facie Entitlement To
Maintenance And Cure
Hale v. Maersk Line, 732 S.E.2d 8 (Va.
2012):
There is an “escalating scale of liability”
for the manner in which a vessel owner
handles a maintenance and cure claim.
THE RULES:
1. The ship owner is entitled to
investigate and require
corroboration of the claim before
paying maintenance and cure.
10
The Vessel Owner Has The Right To Require The
Seaman To Establish Prima Facie Entitlement To
Maintenance And Cure
THE RULES
2. After investigating a
seaman’s entitlement to
maintenance and cure, the
ship owner is entitled to
deny the claim based on
certain defenses.
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The Vessel Owner Has The Right To Require The
Seaman To Establish Prima Facie Entitlement To
Maintenance And Cure
3. Unreasonably rejecting a claim after investigation exposes the
ship owner to liability for compensatory damages in addition to
benefits.
4. Where there is no reasonable defense to the claim and the ship
owner exhibits “callousness and indifference,” the ship owner is
liable for punitive damages and attorney’s fees.
5. But, “[a]n employer may be exempt from penalties, if ‘the
employer deliberately relies on a reasonable, but ultimately
wrong, legal argument to withhold payment.’”
12
Hale v. Maersk Line (Va. 2012)
• Hale claimed that he suffered
physical and psychological
injury during an attack while
on shore leave.
• When Hale rejoined the ship,
the Master and Chief Mate
observed signs of his
intoxication including the
smell of alcohol on his breath
and lack of motor skills.
13
Hale v. Maersk Line (Va. 2012)
• Master interviewed Hale and asked that Hale submit to
a Breathalyzer test, which he refused.
• Hale was terminated because Maersk had a “zero
tolerance” policy for the use of drugs and alcohol.
• Korean physicians and ER physicians in U.S. found
no objective signs of trauma other than Hale’s black
eye.
14
Hale v. Maersk Line (Va. 2012)
HALE held:
As a matter of law,
• Hale had insufficient evidence to support a claim for
punitive damages;
• Even if Maersk’s investigative findings proved to be
wrong, its denial of maintenance and cure was not
unreasonable.
• The trial court properly set aside the jury verdict
awarding compensatory and punitive damages.
15
Hale v. Maersk Line (Va. 2012)
KEY REASONS
• Two medical examinations after the incident indicated that Hale
suffered only contusions, a black eye and some internal rectal
tenderness.
• There was evidence that Hale’s injuries were actually caused by
his drunken assault of police officers.
• Hale never provided Maersk with any documentation that he was
deemed unfit for duty or needed any additional medical care.
16
“Investigation” Will Not Shield a Vessel Owner
From Liability Once The Seaman Has Established
A Prima Facie Right To Maintenance and Cure
Mai v. American Seafoods Co.
• Affirmed an award of past-due maintenance,
compensatory damages and attorneys’ fees.
• Rejected the vessel owner’s contentions that
it had the right to withhold benefits while
“investigating” the seaman’s medical
condition.
17
Mai v. American Seafoods Co.
(Wash. Ct. App. 2011)
MAI HELD:
• The right to investigate is limited to establishing “that
a seaman’s claim is legitimate.”
• A seaman cannot be required to submit to an IME
once she has established prima facie entitlement to
maintenance and cure
18
Mai v. American Seafoods Co.
(Wash. Ct. App. 2011)
KEY REASONS
•
•
•
Nine months before it approved
Mai’s knee replacement, ASC
acknowledged that the surgery
would be curative in nature;
ACS never claimed that she
achieved maximum medical cure
before that surgery;
ASC had access to two years of
Mai’s medical records and that it
paid her treating physicians
without questioning their
qualifications;
19
Mai v. American Seafoods Co.
(Wash. Ct. App. 2011)
• ASC did not dispute Mai’s need for further medical
treatment but claimed it needed second IME to explore
the availability of alternative treatment less expensive
than surgery.
• Facts of case indicated that the “true reason” for the
request for the second IME was to develop expert
testimony for anticipated litigation, rather than any
serious question about Mai’s need for surgery.
20
The Vessel Owner Can’t Turn a “Blind Eye” To Accessible
Evidence Corroborating Validity of A Maintenance and
Cure Claim
THE RULE
• A vessel owner must properly train its claim handlers to
recognize the limits of a seaman’s obligation to “prove” his
entitlement to maintenance and cure and may not turn a
“blind eye” to the seaman’s evidence. Stermer v. ArcherDaniels-Midland Co. (La. Ct. App. 3d Cir. 2014)
• Failure to adequately investigate a “hotly contested”
maintenance and cure claim gave rise to a $300,000.00
punitive damages award and an award of attorney’s fees.
21
Stermer v. Archer-Daniels-Midland Co.
(La. Ct. App. 3d Cir. 2014)
KEY REASONS
• ARTCO’s investigation of the claim was so lax that the
imposition of punitive damages was justified.
• ARTCO’s adjuster relied entirely on the statements of
the employees who denied Stermer had been injured
without giving consideration to any contrary evidence.
22
Stermer v. Archer-Daniels-Midland Co.
(La. Ct. App. 3d Cir. 2014)
• Stermer’s claim was corroborated.
• ARTCO’s adjuster was unaware that the law requires
maintenance and cure benefits to be paid when any
doubt exists about the validity of the claim.
23
Reasonableness of M&C decisions
cannot be determined by hindsight!!
Rose v. Miss Pacific, LLC, 2012 WL 75028 (D.Or. Jan. 10, 2012):
• Court held that the proper focus of determining whether the
defenses asserted will preclude the imposition of punitive
damages for failure to pay M&C is whether the defense was
“reasonable in light of what the employer knew when first
asserting the defense.”
• “Even if a fact is disputed, it is not unreasonable to rely on it.”
• Court rejected a medical opinion on causation disclosed after the
vessel owner asserted its fraudulent concealment defense and
instead focused on what the owner knew at the time of the denial.
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THE SEAMAN’S DUTY TO DISCLOSE PRIOR INJURY
AND THE MCCORPEN DEFENSE
McCorpen v. Central Gulf Steamship Corp., 396
F.2d 547 (5th Cir. 1968):
• The “gross misconduct” defense applies
where the seaman conceals the existence of a
pre-existing medical condition or injury to the
shipowner at the time of hire.
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THE SEAMAN’S DUTY TO DISCLOSE
THE RULE: NO MEDICAL EXAM
• Where the shipowner does not
require a pre-employment medical
examination or interview, a seaman
must disclose past illness or injury
only when in his own opinion the
shipowner would consider it
important.
• Shipowner will be liable if there
were reasonable grounds for the
seaman's good-faith belief that he
was fit for duty.
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THE SEAMAN’S DUTY TO DISCLOSE:
McCorpen Defense
THE RULE: MEDICAL EXAM
• Where the shipowner requires a seaman to submit to a pre-hiring
medical examination or interview; AND
• Seaman intentionally misrepresents or conceals material medical
facts that were “plainly desired”…
• Seaman is NOT ENTITLED to an award of M&C.
• Only applies when a causal link between pre-existing medical
condition and the “disability incurred during the voyage.”
27
Recent Examples of Application of the
McCorpen Defense
Meche v. Alex Doucet; Key Marine Services, L.L.C., No.
14-30032 (5th Cir. January 22, 2015)
• Meche was a captain of a crew boat working off of Louisiana,
and he alleged that he was injured during vessel operations,
aggravating his pre-existing spinal condition.
• Key denied M&C.
• District Court found that since Key did not have a preemployment physical and that “Meche did not consider his preexisting condition to be a matter of importance, Meche did not
conceal his medical history and was owed M&C.
• Court awarded M&C, punitives, attorney’s fees, costs, and preand post-judgment interest.
28
Meche v. Alex Doucet; Key Marine Services, L.L.C., No.
14-30032 (5th Cir. January 22, 2015)
• Appellate Court focused on “non-disclosure” vs. “intentional
concealment”
• Key purchases former employer ; relies on existing personnel file
• Court: Meche intentionally misrepresented medical facts in his
pre-employment physical with former employer.
• Court: No economic sense to require a successor company to
reexamine personnel files of acquired company in order to
assess M&C liability for previously concealed medical issues.
• Court: Meche cannot argue that concealment was not intentional
by claiming that he verbally disclosed his issues during an
employment interview.
29
Boudreaux and Recovery of
Maintenance and Cure Payments
Can the shipowner recover the payments made?
THE RULE
Once a shipowner pays maintenance and cure to the
injured seaman, the payments can be recovered only by
offset against the seaman’s damage award—not by an
independent suit seeking recovery. Boudreaux v.
Transocean Deepwater, Inc. (5th Cir. 2013)
30
Latent Illnesses and the Outer Boundaries of
the Course and Scope Analysis
Messier v. Bouchard Transportation
(2nd Cir. 2012) A case of first
impression.
• A routine blood test conducted
during treatment for the lower back
pain sprain seaman suffered
aboard ship ultimately led to a
diagnosis of B-cell lymphoma.
• Evidence established that Messier’s
lymphoma existed while he was in
service of defendant’s ship.
31
Messier v. Bouchard Transportation
(2nd Cir. 2012)
THE “OCCURRENCE RULE”
A seaman is entitled to “maintenance and cure for any
injury or illness that occurs or becomes aggravated
while he is serving the ship,” regardless of whether it
(absent active concealment) existed prior to
employment.
Same Result: Ramirez v. Carolina Dream, Inc. (1st Cir.
2014) for aplastic anemia.
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