UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 93-7572
_____________________
IN THE MATTER OF THE COMPLAINT OF LIBERTY SEAFOOD, INC.
AS OWNER OF THE F/V GLORIA B FOR EXONERATION FROM AND OR
LIMITATION OF LIABILITY.
LIBERTY SEAFOOD, INC.,
Appellee,
VERSUS
HERNDON MARINE PRODUCTS, INC.,
Claimant-Appellant.
____________________________________________________
Appeal from the United States District Court
for the Southern District of Texas
_____________________________________________________
(November 10, 1994)
Before HIGGINBOTHAM, JONES and BARKSDALE, Circuit Judges.
RHESA HAWKINS BARKSDALE, Circuit Judge:
One of the results of an allision, for which the crews of both
vessels were found at fault, was that seamen were injured on one
vessel and, therefore, received maintenance and cure; and the sole
issue is whether the shipowner/employer who made those payments has
a right to reimbursement from the other shipowner for part of those
payments, even though the latter settled with the seamen on their
damages claims. Herndon Marine Products, Inc., appeals from the
Rule 12(b)(6) dismissal of its claim against Liberty Seafood, Inc.,
for reimbursement of part of the maintenance and cure Herndon paid
its employees. Our holding that Herndon has stated a claim is
compelled by our very recent decision in Bertram v. Freeport Moran,
Inc., No. 93-7575, slip op. 318 (5th Cir. Oct. 7, 1994).
Accordingly, we REVERSE.
I.
In the Gulf of Mexico in 1991, Liberty's vessel drifted into
Herndon's anchored vessel, causing damage to both and injury to the
three seamen aboard Herndon's vessel. Because of the seamen's
injuries, Herndon was required to pay them maintenance and cure. 1
Liberty filed an exoneration and limitation action, pursuant
to 46 U.S.C. § 181 et seq., and Rule F, Fed. R. Civ. P.,
Supplemental Rules for Certain Admiralty and Maritime Claims. In
addition to responding to Liberty's claim, the injured Herndon
seamen filed claims against Liberty for negligence and
unseaworthiness; and Herndon filed claims against it for (1)
indemnity and contribution for the maintenance and cure and for the
costs of defending actions brought by the seamen, and (2) damages
resulting from the loss of use of, and damage to, Herndon's vessel.
Prior to trial, Liberty settled with the three seamen and each
of those claims was dismissed with prejudice. Pursuant to Fed. R.
Civ. P. 12(b)(6) (failure to state a claim), Liberty then moved to
dismiss Herndon's claims for indemnity and contribution, contending
that Herndon could not claim contribution from Liberty, a joint
tortfeasor, because Liberty had settled with the seamen. Herndon
responded, inter alia, that the claim for recovery over against
Liberty for maintenance and cure was separate and distinct from the
1
In response to Liberty's Rule 12(b)(6) motion to dismiss
Herndon's maintenance and cure reimbursement claim, Herndon stated
that it had paid approximately $105,000.
- 2 -
settled claims with the seamen; and that, therefore, the settlement
bar rule was inapplicable.
The district court denied Liberty's limitation claim, but
found the crews of both vessels at fault in the allision,
apportioning 75% to Liberty and 25% to Herndon. No finding was
made as to the percentage of fault, if any, attributable to each of
the injured (and dismissed) seamen.
Thereafter, in ruling on Liberty's Rule 12(b)(6) motion
concerning Herndon's maintenance and cure reimbursement claim, and
because it did not feel there was controlling Fifth Circuit
precedent, the district court looked to the Eighth Circuit's
decision in Associated Elec. Coop. v. Mid-America Transp. Co., 931
F.2d 1266 (8th Cir. 1991), and held that the policies favoring
settlement dictated that Liberty's settlement should bar Herndon's
claim. Accordingly, it granted the motion. Subsequently, Herndon
and Liberty settled all other claims.
II.
As is well-established, we review de novo the Rule 12(b)(6)
dismissal, viewing all well-pleaded facts in the light most
favorable to Herndon. E.g., Cinel v. Connick, 15 F.3d 1338, 1341
(5th Cir.), cert. denied, 115 S. Ct. 189 (1994). For the reasons
stated hereinafter, Herndon has stated a claim.
Maintenance and cure are maritime terms describing a seaman's
right to receive food and lodging (maintenance) and necessary
medical services (cure). E.g., Davis v. Odeco, Inc., 18 F.3d 1237,
1245 (5th Cir.), cert. denied, 115 S. Ct. 78 (1994). It is firmly
- 3 -
established in this circuit that a shipowner required to pay
maintenance and cure may recover those payments from a third-party
who caused, in whole or in part, the employee's injury. See
Bertram; see also, Adams v. Texaco, Inc., 640 F.2d 618 (5th Cir.
1981); Savoie v. Lafourche Boat Rentals, Inc., 627 F.2d 722 (5th
Cir. 1980); Tri-State Oil Tool Indus., Inc. v. Delta Marine
Drilling Co., 410 F.2d 178 (5th Cir. 1969). This right is not
extinguished where, as in this case, the shipowner is apportioned
part of the fault. Rather, that shipowner remains entitled to
contribution from the third-party tortfeasor in proportion to the
third-party's fault. Adams, 640 F.2d at 620-21.
Accordingly, but for Liberty's settlement with the seaman,
there would have been no dispute that Herndon had a right to
reimbursement of part of the maintenance and cure. At issue is the
effect, vel non, that the settlement has on that right.
Liberty notes correctly this circuit's general rule against
claims for contribution by non-settling tortfeasors against
settling tortfeasors. Hardy v. Gulf Oil Corp., 949 F.2d 826, 835-
36 (5th Cir. 1992). However, in Bertram, our court distinguished
the traditional joint tortfeasor settlement case from maintenance
and cure reimbursement claims, and held that a settlement by a
third-party tortfeasor with an injured seaman does not bar a claim
by the seaman's employer for recovery over against that tortfeasor
for maintenance and cure.
In Bertram, an employee of Energy Catering Services was
injured on a drilling platform while returning to the barge on
- 4 -
which he worked. Houma was a contractor on the platform, which was
owned by Freeport. The employee's several claims included one
against his employer, Energy, for maintenance and cure, and one
against Freeport and Houma for negligence. Prior to trial, the
employee settled with all parties, leaving, inter alia, Energy's
cross-claims against Freeport and Houma for maintenance and cure
reimbursement. The district court found Energy to be without
fault, and apportioned fault for Houma at 20%, Freeport at 20%, and
the employee at 60%. It ordered Houma and Freeport to each
reimburse Energy 50% of the maintenance and cure, not just their
portion of fault (20% each). Houma appealed, contending, inter
alia, that its settlement with Bertram should have barred recovery
over by Energy for maintenance and cure.2
In affirming, we held that Adams (1981) and Savoie (1980) were
still binding precedent, notwithstanding the modern trend toward
proportional fault. Therefore, we reaffirmed that an employer's
claim for recovery over for maintenance and cure is separate and
distinct from an injured seaman's claim for damages. Bertram, No.
93-7575, slip op. at 329. Accordingly, we concluded that the
general settlement rule in Hardy, a case that did not involve
maintenance and cure, was not applicable. Id. at 326. Similarly,
we concluded that the Eighth Circuit's opinion in Associated
2
One of the other issues was whether Houma was required to pay
50% of the maintenance and cure, even though it was only 20% at
fault. Bound by precedent concerning an innocent (without fault)
employer, we held that it was. Savoie, 627 F.2d at 724.
- 5 -
Electric, although dealing with a reimbursement claim for
maintenance and cure payments, missed
the critical distinction -- long recognized in this
circuit -- between an employer's right to recover
maintenance and cure payments, and one tortfeasor's
right to recover some or all of a damage award
assessed against it from another tortfeasor.
Id. at 329.
As is well-known, maritime law provides two separate lines of
recovery for an injured seaman: damages, and maintenance and cure.
The seaman may claim maintenance and cure only from its employer;
but, as noted, the employer may recover all, or a portion, of those
payments from a third-party tortfeasor. See Adams, 640 F.2d at
620-21 (allowing recovery of proportionate share when employer
partially at fault); Savoie, 627 F.2d at 724 (allowing total
recovery when employer not at fault). The obligation of an
employer to pay maintenance and cure, which is based on its
employment relationship with the seaman, exists regardless of the
fault, vel non, of the employer. E.g., Aguilar v. Standard Oil Co.
of New Jersey, 318 U.S. 724, 730, 63 S. Ct. 930, 934 (1943);
Bertram, No. 93-7575, slip op. at 323; Brister v. A.W.I., Inc., 946
F.2d 350, 361 (5th Cir. 1991).
As noted, in addition to maintenance and cure, an injured
seaman may also seek damages for negligence and unseaworthiness.
E.g., Cooper v. Diamond M Co., 799 F.2d 176, 179 (5th Cir. 1986),
cert. denied, 481 U.S. 1048 (1987). The damage claim may be
brought against the employer and a third-party tortfeasor. In
turn, through indemnity or contribution, the employer may recover
- 6 -
from the third-party tortfeasor for part or all of any damages
assessed against the employer. See, Loose v. Offshore Navigation,
Inc., 670 F.2d 493, 499-500 (5th Cir. 1982). Thus, in a maritime
collision, a third-party tortfeasor faces two distinct claims by a
shipowner for contribution or indemnity: (1) for damages assessed
against the shipowner; and (2) for maintenance and cure. As
stated, Bertram holds that a settlement by the third-party with an
injured seaman on the damage claim will not bar the shipowner's
recovery of maintenance and cure.
The holding in Bertram controls here, even though Herndon,
unlike the employer in Bertram, was found partially at fault. As
noted, our court held in Adams that the partial fault of the
shipowner does not preclude recovery for maintenance and cure from
a joint tortfeasor for its portion of the fault. Because Herndon
and Liberty were found 25% and 75% at fault, respectively, Herndon
has a claim against Liberty for 75% of the maintenance and cure.3
See Bertram, No. 93-7575, slip op. at 333.
Finally, as to any concern over the policy of favoring
settlements, once it is recognized that Liberty in fact had two
separate grounds of liability to the shipowner/employer, it becomes
clear that settlement policy is not implicated. Liberty cannot
extinguish its maintenance and cure liability to Herndon (a
separate and independent claim) by settling a separate and
3
As noted, in the limitation action, the district court found
the crews of both vessels at fault. Liberty's crew was found 75%
at fault for, among other things, failing to properly anchor and
control their vessel. Herndon's crew was found 25% at fault for
failing to keep a proper lookout.
- 7 -
unrelated claim with the injured seamen. As discussed in Bertram,
No. 93-7575, slip op. at 328, public policy favoring settlements
should be advanced by Bertram's holding, because settlement of all
damages and maintenance and cure claims will be fostered, resulting
in the possible termination of all claims, and, hence, the
litigation.
III.
For the foregoing reasons the judgment of the district court
is REVERSED, and this case is REMANDED for further proceedings
consistent with this opinion.
REVERSED and REMANDED
- 8 -