Employer has Heavy Burden to Prove Validity of Hold Harmless Agreement
A maritime employer faces a strict evidentiary burden when trying to uphold the validity of a Release and Hold Harmless agreement between it and an injured employee at the summary judgment phase. In Double J. Marine, LLC v. Nuber, No. 13-5825 (E.D.La Dec. 11, 2013), defendant, Nuber, was injured while employed as a deckhand for plaintiff, employer. Soon after the injury, Nuber signed a Release and Hold Harmless agreement and received $530 dollars in consideration. Two months after returning to work, a specialist diagnosed Nuber with a herniated disk. Nuber then filed an action against his employer alleging negligence and unseaworthiness while also demanding maintenance and cure benefits. Employer moved for summary judgment and urged the court to uphold the release as valid and enforceable.
The court noted that releases of this sort are evaluated to see if the injured party fully understood the agreement and its effect as well as whether the party signed it freely. The burden of proof rests on the party trying to uphold the agreement. The factors for proving a valid agreement include: 1) adequacy of consideration, 2) the adequacy of legal or medical advice available to the injured party, 3) whether or not the negotiations were in good faith and at arm’s length, and 4) whether there were any signs of fraud, deception, coercion, or overreaching.In this case the court found that there were genuine issues of fact that precluded granting employer’s motion for summary judgment. First, the court found there was a question as to whether Nuber fully understood the agreement he signed. Supporting the court’s position on this point was Nuber’s affidavit allegingthat he did not understand the agreement and the fact that Nuber did not have an opportunity to obtain an independent medical evaluation nor discuss his legal rights with counsel. Further, defendant’s educational level, (10th Grade), suggested that he may not have understood the agreement’s ramifications. Second, because the agreement was signed the same day as the follow up hospital visit and prior to any diagnostic testing, the court found there was an issue as to the adequacy of medical advice Nuber had at the time he signed the agreement. Finally, the court noted that the short amount of time between Nuber receiving treatment and signing the release, (both events occurred on the same day), may have suggested overreaching.
