IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 92-7810
MARIENNE JACQUES, Individually,
and as Executrix of the Estate
of RICHARD L. JACQUES,
Plaintiff-Appellant,
versus
KALMAR INDUSTRIES, AB, ET AL.,
Defendants,
versus
HARTFORD ACCIDENT AND INDEMNITY CO.,
Intervenor-Appellee.
Appeal from the United States District Court
for the Southern District of Texas
(November 22, 1993)
( )
Before POLITZ, Chief Judge, HIGGINBOTHAM, Circuit Judge, and
DAVIDSON*, District Judge.
HIGGINBOTHAM, Circuit Judge:
Today, we decide that a workman's compensation carrier's right
to subrogation under the Longshore and Harbor Workers' Compensation
Act reaches its insured worker's recovery of punitive damages from
a third-party.
*
District Judge of the Northern District of Mississippi,
sitting by designation.
I.
Marienne Jacques sued Kalmar Industries AB, Kalmar LMV AB,
Kalmar, Inc., Strachan Shipping Company, and Alfred Allen Price for
the wrongful death of her husband, Richard L. Jacques. Mr. Jacques
was a marine surveyor who lived in Galveston, Texas. His employer,
World Marine Associates, Inc., sent him to work for Strachan at a
dockyard in Mobile, Alabama. While working in Mobile, Mr. Jacques
was struck and killed by a forklift manufactured by Kalmar
Industries and driven by Alfred Allen Price. Hartford Accident &
Indemnity Company was the compensation carrier for World Marine,
pursuant to the Longshore and Harbor Workers' Compensation Act, 33
U.S.C. § 901 et seq. Hartford began paying death benefits to Mrs.
Jacques.
Mrs. Jacques filed suit in Texas state court. Defendants
removed to the United States District Court for the Southern
District of Texas on the basis of diversity jurisdiction. Hartford
intervened to enforce its subrogation rights under the LHWCA. When
Mrs. Jacques settled with defendants Kalmar Industries and Strachan
for $750,000, Hartford sought reimbursement from the settlement for
the benefits it had already paid Mrs. Jacques and relief from
future benefits it might owe. Mrs. Jacques and Hartford both filed
motions for summary judgment on the subrogation issue. The
district court granted judgment in favor of Hartford, allowing it
to recover its lien of $58,531.88 from the settlement proceeds and
relieving Hartford of its obligation to continue to pay benefits.
Mrs. Jacques appeals only the subrogation issue. We AFFIRM.
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II.
Mrs. Jacques argues that the LHWCA affords Hartford a
subrogation right only for compensation that she might receive for
her husband's death. The parties agree that Alabama law governs
Mrs. Jacques' claims against Kalmar Industries, Strachan Shipping
and Price. Mrs. Jacques argues that, under Alabama law, her claim
was for punitive damages rather than compensatory damages; that her
settlement did not "compensate" her. Hartford then, she says, has
no right to reimbursement from the settlement.
Mrs. Jacques' argument rests on two pillars. First, she
asserts that Alabama law allows only punitive damages, and no
compensatory damages for wrongful death. This argument has
considerable force. We need not decide the matter, however,
because Mrs. Jacques must also persuade that the LHWCA does not
provide a subrogation right for reimbursement from a payment of
punitive damages, and we are not persuaded.
A.
Alabama law allows the spouse of a person killed as a result
of a wrongful act, omission, or negligence to recover damages.
Ala. Code § 6-5-410 (1993). Alabama courts have described these
damages as punitive in nature. See, e.g., Industrial Chemical &
Fiberglass Corp. v. Chandler, 547 So.2d 812, 818 (Ala. 1988)
("damages recoverable in an Alabama wrongful death action are
punitive in nature") (citation omitted). There is uncertainty,
however, whether a payment for wrongful death should be considered
punitive in all contexts. Id. at 824 ("I must view damages in
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wrongful death cases as something unique and as not punitive
damages qua punitive damages.") (Houston, J., concurring). Mrs.
Jacques argues that regardless of any uncertainty in
categorization, damages for wrongful death are sufficiently
punitive to defeat subrogation of carriers of workers' compensation
insurance.
Mrs. Jacques points to the subrogation rights of insurance
carriers under the Alabama state workers' compensation scheme. She
argues that it is only by explicit statutory authorization under
its compensation scheme that the carriers are entitled to
reimbursement for recovery for wrongful death. Ala. Code § 25-5-11
(1993). Mrs. Jacques asserts that this provision is necessary
because the punitive nature of a recovery for wrongful death would
otherwise preclude reimbursement. The argument is logical but, as
is so often the case, the reality is not so clear. The Supreme
Court of Alabama, in allowing an insurance carrier to recoup from
damages for wrongful death, did not explicitly address their
punitive nature. See Maryland Cas. Co. v. Tiffin, 537 So.2d 469,
474 (Ala. 1988) (allowing reimbursement for wrongful death without
discussing the punitive nature of the recovery). But here we stop
because, as we will explain, we find the LHWCA allows carrier
reimbursement from an award of punitive damages, and we need not
explore further the characterization of awards for wrongful death
under Alabama law.
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B.
We have not yet addressed whether a carrier of workers'
compensation insurance has a right to subrogate under the LHWCA
when the workers' third-party suit produces payment of punitive
damages.
We have interpreted the LHWCA to allow recovery from a
judgment or settlement for both workers' compensation benefits
already paid and those yet to be paid. Peters v. North River Ins.
Co., 764 F.2d 306, 312 (5th Cir. 1985). We have further read the
Act to require similar reimbursement to an insurance provider from
a suit brought under an unassigned cause of action by an employee
as from a suit brought under an assigned cause of action by the
carrier of workers' compensation insurance. See Hayden v. Kerr-
McGee, 787 F.2d 1000, 1004 (5th Cir. 1986) (refusing to vary
recovery under subrogation lien depending on whether employer or
employee brought action against third party). Moreover, we have
declined to limit reimbursement of such an insurer based on the
nature of the employee's recovery. See Hayden, 787 F.2d at 1003
(reimbursement to insurance provider depends on employee's total
award, not on percentage of actual loss employee recovered); Haynes
v. Rederi A/S Aladdin, 362 F.2d 345, 350 (5th Cir. 1966), cert.
denied, 385 U.S. 1020 (1967) (insurance provider entitled to
reimbursement from employee's recovery including compensation for
pain and suffering). The organizing principle of these decisions
has been that the "insurer shall recover in full its payments from
the total recovery obtained by the injured workman from a third
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party defendant, regardless of what that recovery replaces or is
termed by the court." Haynes, 362 F.2d at 350. See also Hayden,
787 F.2d at 1003. That Alabama deems recovery for wrongful death
to be punitive rather than compensatory in nature does not offer a
basis for limiting the application of this principle. To the
contrary, Alabama's legislatively adopted policy of allowing an
insurer reimbursement from a recovery for wrongful death reflects
a policy choice similar to the one we find the Congress made with
the LHWCA. At least one sister circuit has reached a similar
result. In Force v. Director, Office of Workers' Compensation
Programs, 938 F.2d 981 (9th Cir. 1991), the Ninth Circuit allowed
reimbursement from a punitive damages award. In doing so, the
court emphasized that the LHWCA does not distinguish between
different categories of damages. The court found no reason to
protect punitive damages from an insurer's subrogation rights. Id.
at 984. We join in this view.
AFFIRMED.
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