Cake and Ice Cream: Double Recovery in Subrogation?
KENDRICK WILLIAMS AND LATIKASHAWN WILLIAMS, INDIVIDUALLY AND ON BEHALF OF THEIR MINOR CHILD, DESMONAE WILLIAMS v. BUCK KREIHS MARINE REPAIR, LLC, No. 2021-C-0001, 2021 LEXIS 239, 2021 WL 717780 (La.App. 4 Cir. Feb. 24, 2021)
By: Dominic A. Wilson
Kendrick and Latikashawn Williams, individuals and on behalf of their minor child, filed suit against Buck Kreihs Marine Repair, L.L.C. (“BKM”) alleging negligence, and maintenance and cure pursuant to the Jones Act, 46 USCA §30104, General Maritime Law, and La. C.C. art. 2315.
The incident arose on November 20th, 2017, when Mr. Williams was working for Associated Terminals, L.L.C. (“Associated Terminals” or “Employer”) and employed as an equipment operator and seaman on the Myrtle Grove Marine Terminal (“MGMT”), a watercraft operating in the navigable waters of the Mississippi River. Mr. Williams was on fire watch on the MGMT when BKM workers were cutting steel above him. From this, the steel fell and struck Mr. Williams underneath, causing debilitating injuries to his shoulder and back. As an employer, Associated Terminals paid for medical treatment and maintenance and cure benefits under General Maritime Law. The Employer tendered an amount of $189, 221.25 to the Claimant. However, the Claimant filed an action against BKM for damages and initially filed a first amended and restated petition naming the Employer as the additional defendant and averred negligence and maintenance and cure.
In response, the Employer answered and asserted a cross-claim against BKM for reimbursement of maintenance and cure payments tendered to Mr. Williams. The Claimant and Employer eventually reached a settlement agreement in the amount of $50,000 by which the Claimant would release the Employer from all liability. Within this settlement agreement, the amount paid to Mr. Williams was for maintenance and cure benefits, but not pursuant to the Longshore Harbor Workers’ Compensation Act, “LHWCA.” The Employer assigned its cross-claim against BKM over to the Claimant pursuant to the settlement agreement. The cross-claim entailed reimbursement from BKM for maintenance and cure benefits payments. The Claimant filed a Second Supplemental Superseding Petition for Damages, averring negligence and reimbursement of maintenance and cure in accordance to the Jones Act, 46 USCA § 30104, General Maritime Law, and La. C.C. art. 2315. BKM filed its response to the supplemental petition for damages, including no cause of action or a peremptory exception of no right of action. BKM also alleged that the law banned double recovery of maintenance and cure benefits by a seaman. Finally, BKM averred that under General Maritime Law, an employer cannot assign the right to reimbursement and recovery to an employee. The Claimant filed an opposition to BKM’s allegations, and BKM filed its subsequent reply in support of their arguments.
The trial court granted BKM’s exception of no right of action concluding that “as [the] plaintiff may not be subrogated to the rights of his employer to be reimbursed for maintenance and cure, and because plaintiff has already received maintenance and cure and may not collect it a second time.”[1] In response, the Claimant filed an interlocutory writ application timely, and the Fourth Circuit Court of Appeals in Louisiana granted it.
The state appeal court initiated its opinion by stating that the standard of review of a trial court’s ruling on an exception of no right of action is de novo.[2] From this, the panel recited the holding in Abadie v. Arguelles, where “[s]pecifically, ‘[t]he function of an exception of no right of action is to determine whether the plaintiff belongs to the class of persons to whom the law grants the cause of action asserted in the suit.’”[3] Additionally, the “exception of no right of action assumes that the petition states a valid cause of action and questions whether the plaintiff in the particular case has a legal interest in the subject matter of the litigation.”[4] Furthermore, in Abadie, the Defendant or the party asserting exception has the burden of proving such exception of no right of action.[5] It is worthy to mention that according to La. C.C.P. art. 931, “On the trial of the peremptory exception pleaded at or before the trial of the case, evidence may be introduced to support or controvert any of the objections pleaded when the grounds thereof do not appear from the petition.”[6]
Referring back to the pleadings on the record, BKM contended that the Claimant receiving payments from BKM is double recovery and is disallowed under General Maritime Law and laws of equity under the doctrine of unjust enrichment. However, BKM bears the burden of proving the exception. BKM submitted to the court that there are no cases that detail a plaintiff asserting a claim for reimbursement after an employer assigned the right to them, causing double recovery maintenance and cure benefits from a separate party. But the court looked to Complaint of Liberty Seafood Inc., wherein the U.S. Fifth Circuit Court of Appeals found, “two separate lines of recovery for an injured seaman: damages, and maintenance and cure. The seaman may claim maintenance and cure only of its employer; but, as noted, the employer may recover all, or a portion, of those payments from a third-party tortfeasor.”[7] In support of the Claimant, the Louisiana Fourth Circuit referred to Blanchard v. United States, where the “the employer’s claim for reimbursement of maintenance and cure is a separate, non-derivative claim.”[8] Turning to Louisiana Civil Code Article 2642, it provides the following:
“[a]ll rights may be assigned, with the exception of those pertaining to the obligations that are strictly personal. The assignee is subrogated to the rights of the assignor against the debtor.”[9]
Furthermore, in interpreting this statute, King v. Illinois Nat. Ins. Co. provides that “[t]he law is clear that a litigious right, a cause of action which is the subject of pending litigation, is transferable by assignment pursuant to Louisiana Civil Code article 2652.”[10]
From the statutory and jurisprudential interpretation, the Fourth Circuit Court concluded that BKM failed to meet its burden of proof by providing an applicable statute or case that bars an employer from assigning the right of reimbursement for maintenance and cure payments. The court found that the Claimant exercised an appropriate remedy with the Employer providing a right of reimbursement of maintenance and cure benefits to the Claimant, all to eventually assert an action against BKM. Thus, the Claimant indeed had a right of action. Last, BKM asserted that if the court found that the trial court erred in granting such an exception, then the court must find that the Claimant’s assertions are prescribed. However, the court referred to La. C.C.P. art. 927 (B), which provides that “[the court] may not supply the objection of prescription.”[11] Further, BKM failed to seek a supervisory review on the issue. Therefore, in conclusion, the court held that the trial court erred in granting BKM’s exception of no right of action, and the judgment was remanded for further proceedings.[12]
[1] Williams v. Buck Kreihs Marine Repair, LLC, No. 2021-0001, 2021 La. App. LEXIS 239, at 4, 5 (La. App. 4 Cir. 02/24/21).
[2] N. Clark, L.L.C. v. Chisesi, No. 16-0599, p. 3 (La. App. 4 Cir. 12/7/16), 206 So. 3d 1013, 1015.
[3] Abadie v. Arguelles, 19-0749, p. 3 (La. App. 4 Cir. 2/19/20), 292 So. 3d 961, 963 (quoting N. Clark, 16-0599, p. 5, 206 So. 3d at 1016).
[4] Van Meter v. Gutierrez, 04-0706, p. 7 (La. App. 4 Cir. 2/16/05), 897 So. 2d 781, 786.
[5] Abadie, 19-0749, p. 3, 292 So. 3d at 964.
[6] La. C.C.P. art. 931 (LexisNexis, Lexis Advance through the end of the 2020 Regular Session, through the end of the 2020 First Extraordinary Session, and through the end of the 2020 Second Extraordinary Session).
[7] Complaint of Liberty Seafood, Inc., 38 F.3d 755, 758 (5th Cir. 1994).
[8] Blanchard v. United States, 12-CV-3140, 2014 WL 4678811, at *4 (W.D. La. 9/19/14).
[9] La. C.C. Art. 2642 (LexisNexis, Lexis Advance through the end of the 2020 Regular Session, through the end of the 2020 First Extraordinary Session, and through the end of the 2020 Second Extraordinary Session).
[10] King v. Illinois Nat. Ins. Co.,08-1491, p. 7 (La. 4/3/09), 9 So. 3d 780, 785.
[11] La. Code Civ. Proc. Ann. § art.927(B) (LexisNexis, Lexis Advance through the end of the 2020 Regular Session, through the end of the 2020 First Extraordinary Session, and through the end of the 2020 Second Extraordinary Session).
[12] Supra, note 1 at *9.
