Lead Opinion
This аppeal challenges the ruling of the District Judge in an admiralty case that the amount due a seaman for maintenance should be offset by his earnings during the period of his illness.
There is no dispute as to the facts. Clifford Vaughan served as seaman on the S.S. National Liberty, an American ship, from November 26, 1956 to March 2, 1957, when he was discharged at Norfolk, Virginia, upon the termination of the voyage. On January 5, 1959, he filed a libel against the ship and its owners claiming damages on two causes of action : First, that through the unseaworthiness of the vessel and negligence of the defendants he had contracted tuberculosis and, second, that he was entitled to maintenance and cure until he recovered from his illness. The first cause of action was decided against the seaman and on this appeal we are concerned only with the second cause of action.
Upon his discharge from the ship the libellant was furnished by the master with a certificate entitling him to treatment at the Public Health Service Hospital. He entered the hospital
This conclusion was in accord with recognized authority. It was held in Wilson v. United States, 2 Cir.,
There is nothing in the decision of the Second Circuit in Reardon v. California Tanker Co.,
Although the seaman in the instant case suffered no damages from the failure of the respondent to pay maintenance until ordered to do so by the court, he was obliged to pay attorney’s fees in the prosecution of the suit. On this account he urges that he should be allowed an amount to cover this expense in the judgment of the court. There is, however, no authority for such procedure. The general rule is that in suits for breach of contract counsel fees may be allowed to the plaintiff if he can show that defendant’s breach of contract has caused litigation against third parties in which the plaintiff has been obliged to secure the servicеs of counsel, but the rule' does not deal with attorney’s fees paid by the plaintiff in his suit against the defendant himself for breach of contract. 5 Corbin on Contracts § 1037; Restatement of Contracts, Vol. 1, § 334; 15 Am.Jur., Damages, § 142; McGaw v. Acker, Merrall & Condit Co.,
Affirmed.
Notes
. The seaman made two voyages on the ship between November 26, 1956 and March 3, 1957, when he signed off at the end of the voyage. He was treated at the hospital between March 7, 1957, when he аpplied, and August 25, 1959, when he was discharged as cured. During most of this period he was an out-patient. By the decree of the court he was allowed maintenance for 820 days between March 7, 1957 and August 25, 1959, at the rate of $8 a day, amounting in the-aggregate to $6,560. The earnings which he was able to make during this period as a taxicab driver, without injury tc> himself, were offset against this sum.
. In Yates v. Dann, D.C.Del.,
Dissenting Opinion
(dissenting).
Even more than the result in the immediate case, the tendency of the court’s ■decision and its potential impact upon future cases give me concern. The holding carries ominous implications for.the future of the ancient right of maintenance apd cure.
Reliance is placed upon two decisions in the Second Circuit which are inconsistent with each other and which, in any event, fail to apply the proper standard in determining the right to maintenance and cure. For reasons to be stated, I prefer the rule announced by the Third Circuit in Yates v. Dann, D.C.Del.1954,
We are dealing here with no abstract question, but with a legal issue arising upon judicially established facts. We begin with the District Court’s unchallenged finding that from June 6, 1957, when Vaughan was discharged as an inpatient of the United States Public Health Service Hospital and given outpatient status, until August 25, 1959, when he was pronounced fit for duty, he was entitled to maintenance. The owner was duly notified and it is undisputed that a copy of the hospital record was sent by registered mail to its insurance carrier. Whether the plaintiff was suffering from active tuberculosis, as suspected, was not definitely determined, but the significаnt finding of the District Court was that “he undoubtedly had a condition which required treatment.”
The validity of this explicit finding which is the basis of the seaman’s claim for maintenance was at no time ’ contested. It has not been suggested that maximum recovery was attained earlier than August, 1959, the date adopted by the District Court, nor is it asserted that the plaintiff was earlier fit to perform seaman’s duties. Nevertheless the shipowner, who knew of the man’s condition, simply withheld payments for mainte
The only penalty the owner suffers for this callous violation of its duty is that 6% interest has been added to the accumulated liability. By contrast, the effect of the shipowner’s withholding of payments and forcing court action, has been to subject the plaintiff to substantial expense for counsel fees.
We have not been cited precedents authorizing reimbursement for even reasonable counsel fees, and not even in a case like this where the consequence of the owner’s dereliction bears heavily on the plaintiff.
However, if we are powerless to award counsel fees, or penalties, to do full justice, it becomes all the more imperative not to give undue favor to those who knowingly and wilfully breach the obligation of maintenance by making their improper conduct safe and even profitable.
The first of the cases relied on by the majority, Wilson v. United States, 2 Cir., 1956,
“This obligation for maintenance and cure is, as Mr. Justice Cardozo says, ‘imposed by the law itself as one annexed to the employment * * *. The duty * * * is one annexed by law to a relation, and annexed as an inseparable incident without heed to any expression of the will of the contracting parties.’ Cortes v. Baltimore Insular Line, 1932,287 U.S. 367 , 371-372,53 S.Ct. 173 , 174,77 L.Ed. 368 . It is no more a contract than the obligation of a husband to support his wife is one of contract. Each arisеs out of a relationship voluntarily entered into. But these duties are imposed by the law as an incident to the relationship, not a matter of contract. We do not think, therefore, that the usual rules of damages for breach of contract to pay money are applicable.”186 F.2d at page 974 .
See also Gilmore and Black, The Law of Admiralty, page 257.
The opinion of this court, like that of the court in Wilson, assumes that what is involved here is an ordinary contract, that the relief sought is damages for a breach of contract and that the rule of mitigating damages applies. This is at variance with the above languаge of Justice Cardozo speaking for
The other Second Circuit case upon which the majority relies is Perez v. Suwanee S.S. Co., 2 Cir., 1956,
Thе theory of the Perez case is, I submit with deference, contrary to the spirit and doctrine of maintenance and cure which is deeply rooted in the admiralty law. See: Harden v. Gordon, C.C.D.Me.1823, 11 Fed.Cas. page 480, No. 6,047; Reed v. Canfield, C.C.D.Mass.1832, 20 Fed.Cas. page 426, No. 11,641. Moreover, the course of decision in the Second Circuit strongly suggests that that court has not yet spoken its final word on this point. See Reardon v. California Tanker Company, 2 Cir., 1958,
The correct rule, I think, is to treat earnings during convalescence as wholly irrelevant, since Vaughan’s right to maintenance and cure has been established in accordance with the governing Supreme Court decisions. See: Calmar S.S. Corp. v. Taylor, 1938,
True, in a suit under the Jones Act only such wages may be recovered as the plaintiff has lost by reason of the injury, but this is not such a suit. Likewise in a suit for wages alone, to recover for an unexpired period of a shipping contract, the employer could conceivably assert that the seaman had a duty to minimize his damages by reshipping as soon as possible after his illness. In such circumstances the mitigation rule might be appropriate. Also it may be granted that the nature and extent of a plaintiff’s earnings might be evidence to support a conclusion that there was in fact no further need for treatment and that therefore the right to maintenance has terminated; but on this record no such finding was made or even proposed. The
The court’s opinion makes reference to the provision in the union contract requiring the employer to pay $8.00 per day as maintenance. This provision will be read in vain for any suggestion that there may be a set-off of any kind from the allowable maintenancе. On the contrary, it unqualifiedly entitles the seaman to the payment of weekly maintenance notwithstanding the considerations that have here been imported into the case.
I would prefer to follow the rule laid down in Yates v. Dann, D.C.Del.1954,
When a shipowner genuinely believes that the seaman is no longer in need of
In summary, I find no sufficient warrant for a rule that rewards an owner’s recalcitrance by automatically crediting him with earnings from pаrt-time work ashore to which a sick man may be driven by the goad of hunger. Inevitably such a holding will serve as an inducement to owners, not only in doubtful cases, but even where, as here, no question was or "could be raised as to the right to maintenance, to exert economic pressure on seamen to force them to work regardless of consequences to health.
If the rule of Yates v. Dann, supra, enunciated by the Third Circuit, is considered defective in permitting a sick or injured man to retain sums he has earned during convalescence when maintenance was admittedly payable but not paid, it is certainly a lesser defect than that embodied in the competing rule of the Second Circuit, which by turning such earnings over to a defaulting employer who presents no excuse for his default, offers temptation to other employers to practice delay and harshness.
. The record shows that the attorney charged the seaman 50% of the award. I express no opinion on the reasonableness of the charge, as the majority does not deal with this question.
. Suit for aggravation of the physical condition can avail in only the limited number of cases where it is possible to demonstrate aggravation. In the vast majority of cases where maintenance benefits are unjustifiably withhold it will be unlikely that such aggravation can be satisfactorily proved or disproved, yet considerable hardship may have been inflicted on the sick or injured seaman. An award of interest, months or years later, cannot possibly be an adequate measure of redress in such cases.
. Despite the absence of recent specific holdings on this question, a reasonable argument can be made on principle and authority for the award of counsel fees here. It has been said that while admiralty courts lack equity jurisdiction, they may apply equitable principles. Gilmore and Black, The Law of Admiralty, pages 37, 38.
In equity, in exceptional cases where it has been deemed essеntial to the doing of justice, counsel fees have been allowed. Notably, in this circuit, Chief Judge Parker, upholding the award of a counsel fee against a labor union to a Negro who was compelled to bring suit to redress discriminatory conduct, wrote:
“ * * * Ordinarily, of course, attorneys’ fees, except as fixed by statute, should not be taxed as a part of the costs recovered by the prevailing party; but in a suit in equity where the taxation of such costs is essential to the doing of justice, they may be allowed in exceptional cases. The justificatiоn here is that plaintiffs of small means have been subjected to discriminatory and oppressive conduct by a powerful labor organization which was required, as bargaining agent, to protect their interests. The vindication of their rights necessarily involves greater expense in the employment of counsel to institute and carry on extended and important litigation than the amount involved to the individual plaintiffs would justify their paying. In such situation, we think that the allowance of counsel fees in a reasonable amount as a part of the recoverаble costs of the case is a matter resting in the sound discretion of the trial judge. * * * ” Rolax v. Atlantic Coast Line R. Co., 4 Cir., 1951,186 F.2d 473 , 481, and cases there cited.
Dor an application of the doctrine in an admiralty case, see opinion of Justice Story, in The Apollon, 1824,
“It is the common course of the admiralty to allow counsel fees, either in the shape of damages or as part of the costs.”
. For the withholding even a portion of a seaman’s wages a severe sanction is provided in the law by way of an award of two days’ pay for each day that payment is withheld. The underlying policy (in respect to wages) would seem to justify a similar rule in the instance of an unwarranted retention of maintenance. However, the law with which we are here concerned does not go so far and we may not supply a penalty provision to give symmetry to the law.
For withholding benefits when due under the Longshoremen’s and Harbor Workers’ Compensation Act that Act does make provision for penalties. 33 U.S.C.A. § 914.
. I do not intimate that if the seaman were permitted to recover reasonable counsel fees, his incidental earnings during convalescence could then be off set ■ against his maintenance.
. Cf. Bradt v. United States, 2 Cir., 1955,
. See also Jones v. Waterman S.S. Corporation, 3 Cir., 1946,
. Article II Section 13 of the union contract reads:
“Section 13. Maintenance and Cure. When a member of the Unlicensed Personnel is entitled to maintenance and cure under Maritime Law, he shall be paid maintenance at the rate of $8.00 per day for each day or part thereof, of entitlement. The payment due hereunder shall be paid to the man weekly. This payment shall be made regardless of whether he has or has not retainеd an attorney, filed a claim for damages, or taken any other steps to that end and irrespective of any insurance arrangements in effect between the Company and any insurer.” (Emphasis supplied.)
. It must be understood, of course, that the seaman’s rights are not restricted to the union contract, since the duty to provide maintenance and cure, as previously noted, “is one annexed by law to a relation, and annexed as an inseparable incident without heed of any expression of the will of the contracting parties.” Cortes v. Bаltimore Insular Line,
. The case was remanded for reasons unrelated to the present question.
. In Yates v. Dann, supra, the District Court did not reduce the libellant’s maintenance award by the amounts earned by him while still under treatment as an out-patient, and plainly did not consider such a reduction proper, for it said that a seaman should not be thus “penalized.”
From the Court of Appeals’ interpretation of the lower court’s opinion, it is clear that the reason the maintenance award had been diminished in the District Court from $18,205 to $2,821 was that elements of maintenance had been included in the recovery of damages under the Jones Act. The libellant was demanding maintenance, not only as part of the wage award under the Jones Act, but also in a separate claim for maintenance, and objected to a reduction of the mаintenance award in an amount corresponding to the maintenance included in the Jones Act award. It was this duplication, insisted upon by the libellant, that was condemned, for certainly the shipowner should not be subjected to a double recovery for maintenance. Equally certain is it that the Court of Appeals did not hold, just as the District Court did not hold, that the shipowner was entitled to a credit for earnings against his liability for maintenance and cure. In light of the Court of Appeals’ opinion, it would appear, therefore, that the District Judge used the term “wages” to include maintenance as well. Thus, as I read the direction of the Third Circuit to the District Court, du
See also Hanson v. Reiss Steamship Company, D.C.Del.1960,
. Courts will not fail to take judicial notice of the universally recognized fact that rest is an important therapeutic measure for patients suffering from tuberculosis and other pulmonary ailments.
