Opinion · Court of Appeals for the Second Circuit
Toomey v. Waterman SS Corporation
123 F.2d 718
- Type
- Opinion
- Court
- Court of Appeals for the Second Circuit
- Jurisdiction
- Federal
- Date
- 1941-11-24
- Topic
- bankruptcy
AUGUSTUS N. HAND, Circuit Judge. The questions raised by this appeal are whether the plaintiff by acceptance of the compensation paid under the Longshoremen’s Act elected to abandon his right to recover indemnity from third persons and whether, irrespective of a conscious election, such an acceptance operated as an assignment to his employer, Ryan Stevedoring Company, of all his rights to recover damages against Waterman Steamship Corporation and Waterman Steamship Agency, Ltd. Under Title 33, Section 914 (a) U.S.C.A. the act provides: “Compensation * * * shall be paid periodically, promptly, and directly to the person entitled thereto, without an award, except where liability to pay compensation is controverted by the employer.” Section 933 (a) provides that: “If.on account of a disability or death for which compensation is payable under this chapter the person entitled to such compensation determines that some person other than the employer is liable in damages, he may elect, by giving notice to the deputy commissioner in such manner as the commission may provide, to receive such compensation or to recover damages against such third person.” Section 933 (b) (prior to amendment on June 25, 1938) provided as follows: “Acceptance of such compensation shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person, whether or not the person entitled to compensation has notified the deputy commission…
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TOOMEY v. WATERMAN S.S. CORPORATION,123 F.2d 718(2nd Cir. 1941)
TOOMEY v. WATERMAN S.S. CORPORATION et al.
No. 40.
Circuit Court of Appeals, Second Circuit.
November 24, 1941.
Action by Michael Toomey against the Waterman Steamship Corporation and another to recover damages for injuries caused by negligence, wherein upon defendants' application the plaintiff's employer, Ryan Stevedoring Company, was impleaded as a third-party defendant. From a judgment dismissing the plaintiff's complaint and also the third-party complaint, the plaintiff appeals.
Affirmed.
The plaintiff appeals from a judgment dismissing his complaint in an action in which he sought to recover damages from the Waterman Steamship Corporation and Waterman Steamship Agency, Ltd., for injuries caused by negligence. After the action was brought and upon the application of the defendants, the plaintiff's employer, Ryan Stevedoring Company, was impleaded as a third party defendant on the ground that the negligence, if any, was that of the employer. Thereupon, the third party defendant filed its answer, alleging that the plaintiff had accepted compensation under the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C.A. § 901 et seq., and moved to dismiss the complaint on the ground that his cause of action had been assigned by operation of law to the third party defendant.
The plaintiff, while in the employ of Ryan Stevedoring Company as a longshoreman at Charlestown, Massachusetts, aboard the Steamer Gateway City, fell through a hatchway on December 22, 1937, and was seriously injured. A few days after the accident Merrick, an investigator for the Ryan Company's insurance carrier, visited the plaintiff and made a report to the insurance company which began payment of a series of weekly checks at the rates prescribed by the Longshoremen's Act. He received his first compensation payment on December 30, 1937. With the check for July 5, 1938, the insurance company gave him notice that its physicians had reported that he was able to return to work. He then complained to the local district office of the Federal Compensation Commission and was sent by it to the Marine Hospital for an impartial examination. As a result, the Deputy Commissioner on July 23, 1938, informed the insurance company that he was entitled to have his compensation run to August 7, 1938, and the insurance company continued payments in accordance therewith. At the end of August, 1938, the plaintiff received notice from the Deputy Commissioner that his case was closed. He also received notice that within a year from the date of his last compensation payment, which was on August 16, 1938, he could apply for further compensation, but should, meanwhile, keep a record of his earnings to assure proper computation of whatever partial disability payments might be determined to be due him. He received by weekly payments for compensation a total of $488.57 in addition to all expenses for his medical care and treatment. Thereafter, on October 26, 1939, he brought this action in the District Court against Waterman Steamship Corporation and Waterman Steamship Agency, Ltd., for damages. The Ryan Stevedoring Company, which had been impleaded, moved to dismiss on the ground that the plaintiff, having accepted compensation payments, was no longer the owner of the cause of action which, under the provisions of the Longshoremen's Act, had passed to Ryan Stevedoring Company. The District Court referred the matter to a special master who reported that before the case was closed by the Deputy Commissioner the plaintiff had received some thirty checks every one of which had legibly printed across its face the words: "In payment of amount due under the workmen's compensation act". The master also reported that the plaintiff knew enough to call upon the commission and complain when told that his payments would cease, and also when returning to work to request the commission to hold his case open for partial disability payments. The master also found that after the Deputy Commissioner entertained the plaintiff's application for extended payments and subjected him to an impartial examination, he notified the insurance carrier on July 23, 1938, that he had decided that the plaintiff was entitled to arrears and to payments up to the 7th of the following month. The master reported that in doing these things and in noting on his records the disposition he had made he accomplished all he could have done by a more formal document styling itself an order.
At the time Merrick visited the plaintiff he testified he said to the latter:
"`We cannot pay compensation and leave you sue anybody or claim against anybody' — I didn't say `sue' so much as `claim' because I didn't know whether they were going to hire an attorney or not at the time. He did not even make any mention of any third party but I advised him because of thePage 720fact that there was a question that might arise later on about the hatch."
* * * * * *
"I told him that if he thought he had a case because of a hatch breaking against a ship he could not get compensation, he would have to either take his third party claim — he may have misunderstood me in regard to the third party, but I said the third party claim against the steamship company."
The facts stated in the report of the special master were by stipulation adopted as embodying the facts agreed upon for the purposes of the appeal. The master stated in his report that the plaintiff testified that at the time of taking the compensation payments he did not know that he could sue a third party for his injuries; that Merrick did not tell him that, and that the first he knew of it was about a week after the compensation payments had ceased and he had returned to work, when a friend told him he could sue and referred him to the attorney appearing for him in the action. It was further said in the report that: "* * * it is incredible that the talk with Merrick about the accident, the weekly compensation rate and other matters could have proceeded without some inquiries from the plaintiff about where he stood." The report added that: "The Compensation Act imposes no obligation to see that the employee comprehends all the statute's provisions but, even if it did, the only conclusion supported by the evidence is that the plaintiff knew he was taking payments under the compensation law and stands charged with such knowledge of his rights as the statute contemplated for effecting its provisions."
Upon the foregoing record the District Court ordered judgment dismissing the plaintiff's complaint and also dismissing the third party complaint of the Waterman Steamship Corporation and Waterman Steamship Agency, Ltd., against Ryan Stevedoring Company, Inc.
Barry, Wainwright, Thacher Symmers, of New York City (John C. Crawley, of New York City, of counsel), for appellees Waterman S.S. Corporation and Waterman S.S. Agency, Ltd.
Alexander Ash, of New York City (Edward Ash and Joseph M. Meehan, both of New York City, of counsel), for appellee Ryan Stevedoring Co., Inc.
Before L. HAND, AUGUSTUS N. HAND, and CLARK, Circuit Judges.
Under Title 33, Section 914(a) U.S.C.A. the act provides: "Compensation * * * shall be paid periodically, promptly, and directly to the person entitled thereto, without an award, except where liability to pay compensation is controverted by the employer."
Section 933(a) provides that: "If on account of a disability or death for which compensation is payable under this chapter the person entitled to such compensation determines that some person other than the employer is liable in damages, he may elect, by giving notice to the deputy commissioner in such manner as the commission may provide, to receive such compensation or to recover damages against such third person."
Section 933(b) (prior to amendment on June 25, 1938) provided as follows: "Acceptance of such compensation shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person, whether or not the person entitled to compensation has notified the deputy commissioner of his election." 44 Stat. 1440.
After amendment on June 25, 1938, the last subdivision read as follows: "Acceptance of such compensation under an award in a compensation order filed by the deputy commissioner shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person."
Merrick's testimony which we have quoted showed that he informed the plaintiff that if he accepted compensation under the Longshoremen's Act he could not sue third parties for damages arising from hisPage 721accident. While the master did not make a formal finding that the plaintiff understood that by accepting compensation he was releasing his rights to recover damages against third parties, such was evidently the master's opinion or he would not have said "it is incredible that the talk with Merrick about the accident, the weekly compensation rate and other matters could have proceeded without some inquiries from the plaintiff about where he stood." In other words, it is plain that the master credited the testimony of Merrick that the plaintiff was informed that he could not sue third parties if he accepted compensation under the Longshoremen's Act.
But irrespective of whether there was proof of a conscious exercise of the election given by Section 933(a) to receive compensation instead of recovering damages against third parties, under Section 933(b) "acceptance of such compensation [operated] as an assignment to the employer of all right * * * to recover damages against such * * * person, * * *" and plaintiff accordingly lost his cause of action against the third parties.
In Sciortino v. Dimon S.S. Corporation, 2 Cir., 44 F.2d 1019, affirming D.C.,39 F.2d 210, we held that an employee who accepted compensation thereby lost his right to sue third parties. The Third Circuit reached the same conclusion in The Nako Maru,101 F.2d 716, as did Judge Caffey in the District Court in Freader v. Cities Service Transp. Co.,14 F. Supp. 456. There can be no doubt that the plaintiff was well aware that he was receiving compensation. Under Section 933(b) the acceptance effected a transfer which ended his right to bring the present action. In Johnsen v. American-Hawaiian S.S. Co.,98 F.2d 847, the Court of Appeals for the Ninth Circuit overlooked the definite language of Section 933(b) whereby "acceptance" of "compensation shall operate as an assignment to the employer of all right * * * to recover damages against such third person * * *." We do not regard Section 933(a) as limiting Section 933(b), but rather as only aimed at an election, binding on the employee, after notice to the Deputy Commissioner, in a case where no acceptance of compensation has yet occurred.
While Section 933(b) was amended on June 25, 1938, the amendment occurred after all but one of the payments of compensation had been made. Section 933(b) as it stood prior to amendment, in our opinion, governed the case and did not apply in its amended form or operate retroactively. Even if it did, we think that the compensation was accepted "under an award in a compensation order filed by the deputy commissioner." The master reported that the Deputy Commissioner noted in his records the disposition he had made of the plaintiff's claim for compensation. This act, though informal, was equivalent to an order and satisfied the provisions of the amendment.
Under the New York State Workmen's Compensation Law, Consol. Laws c. 67, a provision that the award of compensation shall operate as an assignment of the cause of action of the employee against third parties was eliminated in 1937, Chapter 684, Laws of 1937, and since then an employee may accept compensation and also bring an action against a third person within six months after the awarding of compensation. It may be that it is more just to allow an employee to resort to both remedies than to have acceptance of compensation either with or without an award operate to divest his cause of action. That, however, was a consideration for the law-making body. In any event the chance for constant differences over an employee's understanding of his legal rights which is involved in the interpretation of the act sought by the plaintiff is far from desirable. It would seem better that an employee who has accepted compensation should either lose his individual right to sue third parties or should retain both rights. If he knows he is getting compensation, as he plainly did here, that in our opinion was enough.
Judgment affirmed.