Employer Not Automatically Entitled to Restitution for Maintenance and Cure Paid to Seaman Who Intentionally Misrepresents or Conceals Pre-existing Medical Condition

In Boudreaux v. Transocean Deepwater, Inc., 2013 U.S. App. LEXIS 5288 (5th Cir. Mar. 14, 2013), the U.S. Fifth Circuit Court of Appeals, perhaps the country’s most experienced and prolific appellate court in admiralty and maritime cases, in an opinion authored by Judge Patrick E. Higginbotham, reaffirmed the judiciary’s historical deference to seamen.

Before Wallace Boudreaux began work as a Jones Act seaman for Transocean, he answered “no” on the employer’s pre-employment medical questionnaire which asked if he had a history of back troubles.  After five months of working for Transocean, Boudreaux said he’d injured his back while servicing equipment.  Transocean then paid him maintenance and cure for nearly five years.  Boudreaux later sued Transocean alleging it had failed to properly fulfill its general maritime law maintenance and cure obligation to him.

In the discovery phase of Boudreaux’s lawsuit, Transocean found out Boudreaux had had a history of back problems before he began work for Transocean.  It then filed an unopposed motion for partial summary judgment on Boudreaux’s claim for further benefits, invoking McCorpen v. Central Gulf Steamship Corp., a 1968 Fifth Circuit Court of Appeals decision.  McCorpen holds that a maritime employer does not owe its seaman employee maintenance and cure if it can show the seaman intentionally misrepresented or concealed a pre-existing medical condition that, had it known about at the time of hiring, it would not have hired the person.  But Transocean went a step further.  It filed a counterclaim against Boudreaux seeking to recoup the money it had paid Boudreaux and his medical providers.  It claimed that since it successfully established its McCorpen defense, it should automatically be entitled to these funds.  The Fifth Circuit disagreed.

The New Orleans-based appellate court wrote that a “maritime employer’s obligation to pay an injured seaman maintenance and cure is an essential part of the employment relationship, whether characterized as contractual or otherwise.”   The court noted that in cases where the seaman does not have a Jones Act negligence or general maritime law unseaworthiness-based damages verdict against the employer which such a restitution claim might merely offset, “the employer would gain an affirmative judgment against the seaman.  Although most likely uncollectible, the judgment would stand as a serious impediment to the seaman’s economic recovery, and its threat would have a powerful in terrorem effect in settlement negotiations.”

The Fifth Circuit was also reluctant to adopt Transocean’s argument because it is easier for the employer to escape maintenance and cure liability under the McCorpen rule than it would be to prove the seaman committed fraud.  Under McCorpen, the employer need only show the seaman had an objective intent to conceal, that he or she “failed to disclose medical information in an interview or questionnaire that is obviously designed to elicit such information.”

Whereas, to win a fraud claim, one must show the alleged fraudster had a subjective intent to defraud, that is, the plaintiff in such a claim must show the person actually, in their mind, intended to defraud, or as the court described it here, “fraud hinges on the subjective state of mind of the alleged wrongdoer.”  The court also noted issues of fraud are usually left to a jury to decide and should not be decided on summary judgment by a judge.

Taking the above into account and also the history of solicitude courts have shown to seamen, the court wrote, “a restitution-via-McCorpen counterclaim would, in practice, threaten injured seamen with the specter of crushing liability for misstatements found material.  With respect, such a result is inimical to the existing fabric of maritime law.”  It concluded:

“We are offered no reason to depart from precedent.  There is only the change of advocates and judges, by definition irrelevant to the settling force of past jurisprudence — always prized but a treasure in matters maritime.  All this against the cold reality that the sea has become no less dangerous, and the seaman no less essential to maritime commerce.”

Our law firm, Goldsmith & Ogrodowski, LLC, regularly represents crewmen of towboats, barges, and other commercial vessels.   If you have questions about your or your family’s legal rights under maritime, or admiralty, law, feel free to contact us at 877-404-6529 or 412-281-4340.  Our website is www.golawllc.com.

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