It has long been a rule of the maritime law that a seaman who becomes ill or suffers injury while in the service of a vessel is entitled to “maintenance and cure” until he reaches maximum medical improvement, a point at which medical treatment can no longer improve his physical condition. If the treatment is only palliative, the seaman has reached maximum medical improvement and benefits can be terminated.
While maintenance and cure is recognized by state and federal courts in the United States, its origins lay in the ancient sea codes of the middle ages. In the 1300s, the Code of Oleron required the employer of a seaman who became ill or injured in the service of a vessel to provide him with “lodging,” “candlelight,” and “a woman to attend him” until he was healed and could return to his vessel. Even though seamen have a negligence cause of action against their employer under the Jones Act, they are still afforded this no-fault workers compensation-like remedy.
Recently, the U.S. Supreme Court, the Texas Supreme Court and the 5th U.S. Circuit Court of Appeals have issued significant opinions addressing this ancient seaman’s right.
• U.S. Supreme Court. In Atlantic Sounding Co. v. Townsend (2009), the U.S. Supreme Court overruled the 5th Circuit’s Guevara v. Maritime Overseas Corp. (1995) decision and held that a seaman can recover punitive damages if his employer willfully and wantonly denies maintenance and cure benefits. Prior to this, open-ended punitive damages were not available for such conduct, the seaman’s recovery being limited solely to the attorney fees expended in obtaining the maintenance and cure benefit.
Townsend underscored that marine employers and their claims handlers must ensure prompt and appropriate investigation of a seaman’s claim for maintenance and cure. After Townsend, the Texas Supreme Court and the 5th Circuit continued to refine the seaman’s right to maintenance and cure, particularly in light of the Townsend decision.
• Texas Supreme Court. In Weeks Marine Inc. v. Garza, decided by the Texas Supreme Court on June 22, the plaintiff suffered a head injury, and a doctor recommended by the plaintiff’s supervisor treated him. This doctor declared the plaintiff able to return to work without restrictions. His employer paid for this treatment.
Eventually, the plaintiff began treating with a doctor of his own choice who indicated he was not able to return to work and who ultimately issued a surgical recommendation. His employer did not pay for this treatment.
The plaintiff sued his employer for negligence under the Jones Act and compensatory damages stemming from the unreasonable failure to pay maintenance and cure. The jury awarded compensatory damages of $1.1 million on the Jones Act negligence claim and compensatory damages of $2.5 million resulting from the unreasonable failure to pay maintenance and cure.
The vessel owner appealed the $2.5 million judgment on the grounds that no evidence indicated that the failure to pay maintenance and cure caused any further compensatory damages over and above the $1.1 million the plaintiff received as compensatory damages for his Jones Act claim.
While the Texas Supreme Court did discuss the U.S. Supreme Court’s Townsend decision, the Garza opinion did not involve an award of punitive damages as contemplated by Townsend, as the parties tried Garza before the nation’s highest court issued Townsend.
The Texas Supreme Court found that the plaintiff had failed to prove that his employer’s failure to pay maintenance and cure caused an injury separate and additional to the $1.2 million he had received for the initial injury under his Jones Act claim. Accordingly, the justices vacated the $2.5 million award for compensatory damages for failure to pay maintenance and cure.
• 5th Circuit. On Jan. 3, the 5th Circuit issued its decision in Manderson v. Chet Morrison Contractors Inc., in which it considered the application of the collateral source rule to an employer’s liability for cure payments made to an injured seaman. The court also further defined the conduct required to support an award of punitive damages for failure to pay maintenance and cure as contemplated by Townsend.
With regard to the collateral-source rule, in Manderson the plaintiff sought recovery for the amount initially “billed” or charged by the medical care providers. The shipowner argued that the proper measure would be the amount the medical care providers actually accepted in payment.
The 5th Circuit noted this issue was one of first impression in the circuit. The court defined the appropriate amount of cure as what is needed to satisfy the medical charges for which a seaman actually will be held responsible. Therefore, when a health-care provider’s invoice for its services exceeds what it ultimately accepts from the seaman, the seaman’s employer is obligated to reimburse the seaman only for the actual amount paid, thereby satisfying its cure obligation. This holding dovetails with a recent Texas Supreme Court decision regarding medical expenses in land-based personal injury actions, Haygood v. Escabedo (2011).
The 5th Circuit went on to address exactly what type of conduct supports punitive damages in maintenance and cure case. The 5th Circuit held that to support an award of punitive damages for the vessel owner’s failure to pay maintenance and cure, the seaman must prove more than just mere mistake or even unreasonable conduct. The seaman must prove that the ship owner’s conduct was “callous, egregious, recalcitrant, willful, or persistent.” According to the 5th Circuit, this type of conduct will fulfill the “arbitrary and capricious” standard, thereby allowing the court to award punitive damages for denial of maintenance and cure benefits.
Employers may make mistakes in administering maintenance and cure benefits. Their lawyers should be mindful that mistakes or even unreasonable conduct on their employer-client’s part may not support a punitive damage award. If an employer makes an honest mistake, a prompt correction and administration of the appropriate benefit is the best defense.
Legal systems the world over have been administering maintenance and cure benefits to seamen for more than 800 years. While the basic framework of these benefits has remained strikingly consistent, the courts continue to refine various aspects of this common-law compensatory scheme to ensure merchant seamen who become ill and injured in the service of their vessel receive the appropriate benefits.
Jim Brown sailed as a Jones Act seaman in the U.S. Merchant Marine before law school. He is an admiralty and maritime law partner in Legge, Farrow, Kimmitt, McGrath & Brown in Houston. He received his bachelor of science degree in marine transportation with honors from Texas A&M University and attended the University of Houston Law Center, where he was president of the Admiralty Law Society.