The Effect of Intentional Concealment of a Prior Injury upon a Seaman's Claim for Jones Act Injury
By John Merriam
The duties of maritime employers are owed not to perfect contracts, but to imperfect sailors.
Omar v. Sea-Land Service, Inc., 813 F.2d 986, 990 (9th Cir. 1987).
A colleague called me about a case he had for a processor on a factory fishing boat who was injured. He said there was good liability for unseaworthiness and Jones Act negligence because the processor slipped on a deck covered with fish slime. My colleague complained that the fishing company was only paying $20 per day in maintenance, while the client needed about $45 per day for the basics of rent, food and utilities. I associated on the case and quickly filed a lawsuit in federal court. It was assigned to Judge Lasnik.
My new client, Carlos, hurt his back on July 15, 2003 while working aboard the factory trawler, F/T Arctic Storm. He told my co-counsel that he had a previous back injury aboard a different factory trawler. Imagine our surprise from the Answer and Counterclaim, which alleged that Carlos had not informed the fishing company of the prior back injury. Arctic Storm wanted back the $27,000–plus in maintenance and cure benefits they had already paid, claiming Carlos failed to report the earlier back injury on his employment application.
It seemed that Carlos had an injury to the same area of his back doing the same type of work aboard the Northern Victor in 1997. He hired a lawyer and alleged that he was permanently disabled from fishing. That case settled in 1998 for $30,000. Afterwards, Carlos decided he could in fact work heavy labor again and got jobs on other fishing boats as a processor, and in restaurants. The Northern Victor had been represented by the same law firm, LeGros Buchanan & Paul, that represented Arctic Storm in my case.
Arctic Storm cut off the $20 per day in maintenance, to say nothing of refusing to increase it to $45 per day. I filed a motion for maintenance and cure as soon as I was allowed to under the court rules. In the motion plaintiff conceded he had a prior injury to the same part of his back, which he did not disclose when applying for employment with Arctic Storm, but that he had a reasonable belief that he was fit for duty.
Plaintiff based his motion for the resumption of maintenance and cure on a statement by Professor Schoenbaum:
If the seaman believed in good faith that he was fit for duty at the time of his application (for employment) he can overcome this (intentional concealment) defense.
Admiralty and Maritime Law, § 6-31 (4th ed. 2004).
Plaintiff argued that once a seaman had established his entitlement to maintenance and cure, the burden of proof shifted to the defendant to show that the seaman had achieved maximum cure, or was otherwise no longer entitled to receive maintenance and cure. Johnson v. Marlin Drilling Co., 893 F.2d 77 (5th Cir. 1990). For an intentional concealment defense to maintenance and cure, the defendant has the burden to show: 1) concealment; 2) materiality to the employer’s decision to hire the seaman; and, 3) a causal link between the concealed injury and the new injury. McCorpen v. Central Gulf Steamship Corp., 396 F.2d 547, 549 (5th Cir. 1968).
Relying on Schoenbaum, I argued that the intentional concealment defense was not available to the defendant. Carlos had a reasonable belief that he was fit for duty, when lying to Arctic Storm on the employment application, based upon his resumption of heavy-labor employment. In a fall-back argument, I pointed out that the medical evidence was somewhat conflicting (although it looked pretty bad) about the causal link between the first and second injuries. That presented an issue of fact, I asserted, which should await trial for resolution. Because the employer has the burden of proof on cutting off maintenance, once the entitlement is established, I argued that defendant could not sustain its burden of proof, pre-trial, and that Carlos’ maintenance and cure should be reinstated.
In an Order dated August 4, 2004, reported at 2004 A.M.C. 2319, Judge Lasnik denied the motion for maintenance and cure. The judge distinguished the cases relied upon by Professor Schoenbaum, and stated that a good faith belief by a seaman that he is fit for duty preserves the right to maintenance and cure only if the seaman is not “directly questioned about pre-existing conditions”. 2004 A.M.C. 2321.
In addition to ruling directly contrary to Schoenbaum on this point, Judge Lasnik applied a summary judgment standard to maintenance and cure motions. He ruled that such motions were to be treated like motions brought pursuant to FRCP 56(c). The judge cited to material issues of fact, still in dispute in regard to Carlos’ entitlement to maintenance and cure. “(D)isputed issues of fact prevent summary determination that Plaintiff is entitled to maintenance and cure . . .” 2004 A.M.C. at 2322. Judge Lasnik apparently recognized that defendants have the burden of proof when cutting off maintenance and cure. Although the Order is not entirely clear on this point, this practitioner can only conclude that Carlos lost the motion because his initial entitlement to maintenance and cure—-for which plaintiff has the burden---was a disputed issue of fact.
There is some controversy, and conflicting district court opinions, about whether maintenance and cure motions should be subject to summary judgment standards under rule 56. Keeping in mind the shifting burden of proof, this practitioner is of the opinion that, unfortunately, the Ninth Circuit would follow Judge Lasnik’s reasoning if ever squarely confronted with the issue. Regarding the ‘reasonable belief that the seaman is fit for duty, even after lying to the employer about a prior injury’ standard in Schoenbaum, this writer believes—also unfortunately—that Judge Lasnik’s approach is the better reasoned.
To sprinkle salt on my wounds, Carlos called to say he thought he was about to be deported to Honduras. I called opposing counsel.
“Hey, Dave, my client is losing interest in this lawsuit. I’m making you a one-time only, ‘fire sale’ demand of $10,000. Take it or leave it!”
“We’ll never pay $10,000,” defense counsel snarled. “Your client lied his way into the job.” He then offered to drop the Counterclaim if I would dismiss the lawsuit with prejudice. The conversation ended abruptly. It looked like the case was to be litigated until somewhere between the ‘courthouse steps’ and the courthouse itself---assuming I still had a client within range of the courthouse.
Although there are lots of cases about the effect of intentional concealment upon a seaman’s entitlement to maintenance and cure, there is precious little authority on the impact of intentional concealment upon damages for unseaworthiness and Jones Act negligence. Schoenbaum states that intentional concealment is not a defense to actions under the Jones Act and for unseaworthiness, Admiralty and Maritime Law, supra at § 6-31 (emphasis in original). It was obvious, however, that Judge Lasnik did not regard Schoenbaum as the Gospel.
Meanwhile, Carlos managed to resolve his misunderstanding with the Department of Homeland Security, and stayed in the area. In Requests for Admissions---FRCP 36---sent to Arctic Storm, I included one requesting an admission that intentional concealment is not necessarily a defense to actions under the Jones Act and for unseaworthiness, as a matter of law. Defense counsel’s answer: “Deny”. I then filed a motion for clarification of Judge Lasnik’s earlier ruling, asking for a declaration that even “fraudulent concealment” would not necessarily defeat Carlos’ recovery for unseaworthiness or Jones Act negligence.
On April 28, 2005, Judge Lasnik entered an “Order Regarding Effect of Fraudulent Concealment”, to be reported at 2005 A.M.C. _____ (?).
Fraudulent concealment of a material fact is not a bar to Jones Act or unseaworthiness claims. Omar v. Sea-Land Service, Inc., 813 F.2d 986, 989 (9th Cir. 1987) (Jones Act claim); Compton v. Luckenback Overseas Corp., 425 F.2d 1130, 1133 (2nd Cir. 1970) (unseaworthiness claim).
Order of 4/28/05.
Judge Lasnik went on to observe that even though fraudulent concealment does not automatically defeat plaintiff’s Jones Act and unseaworthiness claims, it can affect causation and could ultimately defeat plaintiff’s attempt to establish liability. Id.
Immediately after this ruling, plaintiff filed yet another motion, this time for attorney fees pursuant to FRCP 36 and 37. The motion was pending when the case settled for $9,999.99.
Filing three motions for the plaintiff in this case did not exactly make a silk purse from a sow’s ear, but it at least worked to recover costs.
John Merriam and Gordon Webb represented the plaintiff. David Bratz of LeGros Buchanan & Paul represented the defendants. The case is Guerra v. Arctic Storm, C04-1010L (W.D. Wash.)
Eagle John Merriam is a former merchant seaman now working as a sole practitioner at Fishermen’s Terminal in Seattle.