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Rodriguez v. Compass Shipping Co.

decided: March 19, 1980.

FREDERICO RODRIGUEZ, PLAINTIFF-APPELLANT,
v.
COMPASS SHIPPING CO. LTD. AND DJAKARTA LLOYD, P.N., DEFENDANTS-APPELLEES .



Appeal from an order of the District Court for the Southern District of New York, entered by Judge Robert L. Carter, dismissing a personal injury action by a longshoreman against a shipowner and bareboat charterer on the ground that the plaintiff had, pursuant to a settlement agreement with his employer, approved by a claims examiner of the Department of Labor, received workmen's compensation pursuant to the Longshoremen's and Harbor Workers Compensation Act, 33 U.S.C. §§ 901, et seq ., and by failing to bring suit against the defendants within six months thereafter assigned his rights to his employer under § 33 (b) of that Act, 33 U.S.C. § 933(b). Affirmed .

Before Waterman, Moore and Mansfield, Circuit Judges.

Author: Mansfield

This is one of a series of personal injury actions by longshoremen against shipowners or charterers, nearly all of which have been dismissed by district courts pursuant to § 33(b) of the Longshoremen's and Harbor Workers' Compensation Act (the Act), 33 U.S.C. § 933(b) on the ground that since the plaintiff in each case settled a compensation claim filed by him against his employer (a stevedoring company) under the Act, accepted the agreed-upon sum, and failed to sue the shipowner until more than six months after the settlement award, he lost his right to assert the claim which was by operation of § 33(b) automatically assigned to his employer. See also Panzella v. Skou, 471 F. Supp. 303 (S.D.N.Y.1979); Francavilla v. Bank Line, Ltd., 470 F. Supp. 94 (S.D.N.Y.1979); Perez v. Arya National Shipping Line, Ltd., 468 F. Supp. 799 (S.D.N.Y.1979); Hernandez v. Costa Armatori, 467 F. Supp. 1064 (E.D.N.Y.1979); Perez v. Costa Armartori, 465 F. Supp. 1211 (S.D.N.Y.1979); Bandy v. Bank Line, Ltd., 442 F. Supp. 882 (E.D.Va.1977).

Section 33(b) provides that

"(b) Acceptance of (statutorily fixed) compensation under an award in a compensation order filed by the deputy commissioner or (Benefits Review) Board shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person unless such person shall commence an action against such third person within six months after such award."

An employer successfully bringing suit against a third party following a statutory assignment must pay the proceeds to the employee, keeping for itself the amount of compensation it paid, attorney's fees, and 20% of the balance. 33 U.S.C. § 933(e). If the employee brings suit himself, he must repay his employer out of the proceeds, retaining the balance of the damage recovery. The Etna, 138 F.2d 37, 41 (3d Cir. 1943).

Plaintiff contends that since his claim under the Act was not the subject of a formal compensation order filed by the deputy commissioner or Board no assignment occurred and his action is neither precluded nor time-barred. He further argues that, even assuming an assignment, since the employer has no intention of prosecuting the claim against the shipowner any assignment of his claim under the terms of the Act must be treated as null and void because of a conflict between his interest and that of his employer. We disagree on both counts and affirm.

On September 4, 1973, plaintiff, a longshoreman employed by the stevedoring company International Terminal Operating Co., Inc. (International), was injured while unloading the S.S. South Breeze, docked in Brooklyn, which was owned by Compass Shipping Company and operated by Djakarta Lloyd as bareboat charterer. Pursuant to § 5(b) of the Act, 33 U.S.C. § 905(b), he filed a workmen's compensation claim against his employer International, which was self-insured, with the Office of Workers' Compensation Programs (OWCP), U.S. Department of Labor. The statute provides for compensation in fixed amount by the employer regardless of fault.

Under regulations implementing the Act, see 20 C.F.R. §§ 702.311-314, a claims examiner employed by the Department of Labor convened an informal conference. At the conference plaintiff and his employer reached an agreement settling plaintiff's claim, which was then memorialized in a written agreement dated November 4, 1974, on an OWCP form regularly used for this purpose. Plaintiff was represented by counsel throughout the OWCP proceedings, the employer had its representative, and the matter was handled by the claims examiner pursuant to 20 C.F.R. § 702.312 which authorizes an informal conference to be called by the deputy commissioner or his designee. Title 20 C.F.R. § 702.312, which has since been revised, provided:

"§ 702.312 Informal conference; called by and held before whom.

"Informal conferences shall be called by the deputy commissioner or his designee assigned or reassigned the case and held before that same person, unless such person is absent or unavailable. When so assigned, the designee shall perform the duties set forth below assigned to the deputy commissioner."

The settlement agreement was signed by the plaintiff, his representative, the employer's representative and the claims examiner. The parties agreed as to the extent of plaintiff's disability, the amount of money due him and the amount of his counsel's fee. Payment of the agreed-upon amount was made promptly by the employer to plaintiff pursuant to the terms of the agreement. Title 20 C.F.R. § 702.315, as it read at the time of the settlement, obligated the employer to commence paying the compensation benefits immediately, without regard to whether the deputy commissioner, acting personally or through his designee, see 20 C.F.R. § 702.312, supra, had filed a formal compensation order, which he was required to do. Title 20 C.F.R. § 702.315 provided:

"§ 702.315 Conclusion of conference agreement on all matters with respect to the claim.

"(a) Following an informal conference at which agreement is reached on all issues, the deputy commissioner shall embody the agreement in a formal compensation order, to be filed and mailed in accordance with § 702.349. Where the problem was of such nature that it was resolved by discussion by telephone or by exchange of written correspondence, the parties shall be notified by the same means that agreement was reached and then the deputy commissioner shall proceed to prepare, file and mail the formal compensation order. In either instance, when the employer or carrier has agreed to pay, reinstate or increase monetary compensation benefits, or to restore or appropriately change ...


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