Steverson v. GlobalSantaFe Corp.

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit

FILED
November 15, 2007

No. 06-60674 Charles R. Fulbruge III
Clerk

JAMES BRAD STEVERSON,

Plaintiff-Appellant,
v.

GLOBALSANTAFE CORPORATION,
d/b/a GLOBALSANTAFE DRILLING COMPANY,

Defendant-Appellee.

Appeal from the United States District Court
for the Southern District of Mississippi, Gulfport

Before HIGGINBOTHAM, GARZA, and BENAVIDES, Circuit Judges.
BENAVIDES, Circuit Judge.
Plaintiff-Appellant, James Brad Steverson, appeals the district court’s
denial of his Federal Rule of Civil Procedure 60(b) motion. Finding that the
district court abused its discretion in denying the motion, we vacate the
judgment and remand for an evidentiary hearing.
I. BACKGROUND
Steverson was employed by Defendant-Appellee, GlobalSantaFe, as a
Derrickman aboard a semi-submersible drilling rug. On October 11, 2003,
Steverson and another hand, Jeff Sutherland, were asked to investigate the
cause of an overflow in the mud ditch. Steverson claims that he asked his
supervisor, Landon Dotson, to slow or stop the pumps and that Dotson refused.
 No. 06-60674

Steverson then went to the cantilever deck to access a plug in the mud
ditch located just below a railed walkway. Sutherland left to find a pry bar.
Steverson attempted to remove the plug by himself and lost his balance, falling
to the main deck, some fifteen to twenty-five feet below. It is undisputed that
Steverson sustained significant injuries and required a lengthy surgery. He
submitted evidence demonstrating that he is unable to return to gainful
employment and suffers from permanent pain and physical restrictions. He
submitted evidence of damages in excess of $4,000,000, excluding pain and
suffering.
Steverson hired William Denton, an attorney in Biloxi, Mississippi, to
represent him. Pam Jenner, an associate, was also working on the case.
Subsequently, Denton passed away, and Jenner, who left the firm, became
Steverson’s sole attorney. Steverson and GlobalSantaFe engaged in an
unsuccessful attempt to mediate a settlement.
On December 14, 2004, Steverson filed suit against GlobalSantaFe,
seeking recovery under the Jones Act and general maritime law for injuries
sustained during his fall. GlobalSantaFe filed an answer denying liability and
raising numerous affirmative defenses. After discovery began, a second
unsuccessful mediation session was held.
Steverson’s attorney requested a settlement conference, which was held
before a magistrate judge on August 5, 2005. After multiple offers and demands,
the attorneys announced a settlement to the court. GlobalSantaFe agreed to pay
$350,000, which included paying $50,000 for an annuity that would pay
Steverson $150,000 at the age of 55. Magistrate Judge Walker entered an order
of dismissal. However, no record of the settlement was taken by the court.
Eight days later, Steverson notified his attorney that she was terminated
and that he “rejected the offer of settlement.” After GlobalSantaFe was notified
that Steverson would not sign the release, it filed a motion to compel settlement.

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Steverson filed a reply to the motion to compel, a motion pursuant to Rule 60(b)
to vacate the judgment of dismissal, and a motion for an evidentiary hearing.
Steverson’s position was that he had not authorized his counsel to accept the
settlement. His position was that his attorney had led him to believe that he
had 30 days to decide whether to accept the settlement offer. Jenner filed a
response to Steverson’s motions, asserting that he had accepted the offer of
$350,000. Jenner also agreed with Steverson’s request for an evidentiary
hearing.1
On December 12, 2005, the magistrate judge filed a report recommending
denial of the Rule 60(b) motion and enforcement of the settlement agreement
without an evidentiary hearing. Steverson objected. On March 28, 2006, the
district court adopted the report and recommendation of the magistrate judge.
Steverson now appeals.
II. ANALYSIS
Steverson contends that the district court committed reversible error in
denying his Rule 60(b) motion for relief from order of dismissal. Rule 60(b)
allows a court to relieve a party from a final judgment based on:
(1) mistake, inadvertence, surprise, or excusable neglect; (2) newly
discovered evidence which by due diligence could not have been
discovered in time to move for a new trial under Rule 59(b); (3)
fraud . . . misrepresentation, or other misconduct of an adverse
party; (4) the judgment is void; (5) the judgment has been satisfied,
released, or discharged . . .; or (6) any other reason justifying relief.

More specifically, Steverson contends that the district court erred in
denying relief under the catch-all provision of Rule 60(b)(6). “Clause (6) is a
residual clause used to cover unforeseen contingencies; that is, it is a means for
accomplishing justice in exceptional circumstances.” Stipelcovich v. Sand

1
However, Jenner subsequently filed a response urging the court to enforce the
settlement and a motion for attorney’s fees and costs.

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Dollar Marine, Inc., 805 F.2d 599, 604-05 (5th Cir. 1986) (citing 7 J. LUCAS &
J. MOORE, MOORE’S FEDERAL PRACTICE ¶ 60.27[2] at 274 (2d ed. 1985)). A
decision with respect to a motion to vacate a final judgment pursuant to Rule
60(b) is left to the “sound discretion of the district court and will only be reversed
if there is an abuse of that discretion.” Id. at 604.
Steverson is a seaman. “Seamen, of course, are wards of admiralty whose
rights federal courts are duty-bound to jealously protect.” Karim v. Finch
Shipping Co., 374 F.3d 302, 310 (5th Cir. 2004) (internal quotation marks and
citation omitted). “[A]ny release or settlement involving [a seaman’s] rights is
subject to careful scrutiny.” Stipelcovich, 805 F.2d at 606 (citing Wink v. Rowan
Drilling Co., 611 F.2d 98, 100 (5th Cir. 1980)). “The ultimate concern in these
cases, however, is not whether the seaman has received what the court believes
to be adequate consideration, but rather whether the seaman relinquished his
rights with an informed understanding of his rights and a full appreciation of
the consequences when he executed a release.” Garrett v. Moore-McCormack
Co., 317 U.S. 239, 248 (1942) (citation omitted). “The adequacy of the
consideration and the nature of the medical and legal advice available to the
seaman at the time of signing the release are relevant to an appraisal of this
understanding.” Id. The shipowner bears the burden of proving that the
seaman’s release is valid. Simpson v. Lykes Bros., 22 F.3d 601, 602 (5th Cir.
1994) (per curiam). Accordingly, a shipowner must demonstrate that the release
was “executed freely, without deception or coercion, and that it was made by the
seaman with full understanding of his rights.” Id.
Steverson asserts that he understood that he had 30 days from August 5th
to accept or decline the $350,000 offer of settlement from GlobalSantaFe. The
August 5th order of dismissal provided as follows:

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All parties having agreed to and announced to the Court a
settlement of this case, and the Court being desirous that this case
be finally closed on its docket,

IT IS ORDERED that this case is hereby dismissed with
prejudice as to all parties. If any party fails to consummate this
settlement within thirty (30) days, any aggrieved party may reopen
the case for enforcement of the settlement agreement within ten (10)
days, and if successful, all additional attorneys’ fees and costs from
this date shall be awarded such aggrieved party or parties against
the party failing to consummate the agreement. This Court
specifically retains jurisdiction to enforce this settlement.

It is undisputed that Steverson had knowledge of the dismissal order. We
believe that a lay person could have interpreted the language as Steverson has
asserted. Indeed, we find the language of this order confusing. It arguably
reads that after 30 days the court would not have jurisdiction to enforce the
settlement. Moreover, Steverson submitted the affidavits of his wife and Daniel
Finley, a friend who had accompanied him to the settlement negotiations. These
affidavits support Steverson’s assertion that he believed he had 30 days to
accept or decline the offer of settlement. Also, the fact that Steverson informed
his counsel within 30 days of the order further supports his assertion.
We also find troubling the circumstances of the settlement negotiations.
The attorneys were in chambers discussing settlement with the magistrate judge
but Steverson, the plaintiff-seaman, was in a different room. The court did not
question Steverson regarding whether he agreed to the amount of the
settlement. No record of the settlement was taken by the court. Additionally,
there is no written authorization for Jenner to accept a settlement of $350,000
on behalf of Steverson. We cast no aspersions on Jenner. Nonetheless, there
should be evidence in the record from the seaman indicating he knowingly
relinquished his rights and had a full appreciation of the consequences at the
time of the settlement. Here, the record contains no such evidence from

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Steverson. After Steverson terminated Jenner’s services, Jenner filed a response
to the Rule 60(b) motion asserting that Steverson had been willing to settle for
a fraction of his documented damages. Apparently recognizing the woeful lack
of evidence, Jenner “agree[d] with [Steverson’s] request for an evidentiary
hearing regarding enforcement of this settlement.” Suffice it to say that we do
not find Jenner’s after-the-fact response makes the required showing with
respect to Steverson’s understanding of his rights and the consequences of the
settlement.
This Court has recognized there are factors that inform a district court’s
decision with respect to a Rule 60(b) motion. Seven Elves, Inc. v. Eskenazi, 635
F.2d 396, 402 (5th Cir. 1981). We are mindful that although “final judgments
should not lightly be disturbed,” the “rule should be liberally construed in order
to achieve substantial justice.” Id. We are also mindful that litigants are not
to use a Rule 60(b) motion as a substitute for an appeal. Id. We do not perceive
the instant motion to be a substitute for an appeal.
Another factor is whether the motion was filed within a reasonable time
after judgment. Id. On August 5, 2005, the order of dismissal was signed.
Within eight days, Steverson informed Jenner that he did not agree to the
settlement and terminated her services. On August 24, Jenner so informed the
court and moved to withdraw as counsel. On August 25, a motion to compel
settlement was filed by GlobalSantaFe. Steverson obtained new counsel, who
filed a notice of appearance on September 15. On October 14, Steverson,
through counsel, filed the Rule 60(b) motion, a response to the motion to compel,
and a motion for an evidentiary hearing. We consider the motion to have been
made within a reasonable amount of time and conclude that the interests of
justice outweigh the virtue of finality of the judgment in this particular case.
Moreover, as set forth previously, the ultimate concern is whether the
seaman relinquished his rights with an informed understanding and a full

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appreciation of the consequences when he settled his claim. Here, there is no
evidence in the record from Steverson indicating that he had an informed
understanding of his rights pursuant to the settlement agreement. Relying on
Stipelcovich, GlobalSantaFe argues that Steverson’s alleged confusion is not
enough to warrant relief. 905 F.2d 599. However, in that case, the evidence
demonstrated that the seaman’s counsel had explained the release to him and
the “release clearly stated the terms of the agreement.” Id. at 606 (emphasis
added). As mentioned previously, we find the dismissal order confusing and
susceptible to Steverson’s interpretation. Further, in Stipelcovich, we stated the
settlement was negotiated by his counsel in apparent good faith at arms length.
Id. In contrast, Steverson fired his attorney and asserted that he had never
given her authorization to settle for $350,000.2 Steverson also asserted that
Jenner led him to believe that he had thirty days to consider whether to accept
the settlement agreement. Jenner denied his accusations. The district court,
however, did not hold a hearing to resolve these conflicting stories or otherwise
assess the legal advice that Jenner provided to Steverson; it should have. See
Garrett, 317 U.S. at 248 (holding that the “nature of the . . . legal advice
available to the seaman at the time of signing” the settlement agreement is
“relevant to an appraisal of [his] understanding.”). Under these circumstances,
we find that the district court abused its discretion in failing to conduct an
evidentiary hearing on Steverson’s Rule 60(b) motion.3
Accordingly, we VACATE the district court’s denial of Steverson’s Rule
60(b) motion and REMAND for an evidentiary hearing. Upon remand, the

2
GlobalSantaFe also cites Simpson, 22 F.3d at 602, as authority for affirming the
settlement. Simpson is inapposite. There, the seaman and his family “acknowledged that they
had been advised by counsel and that they understood the advice.” Id.
3
In view of our disposition, we need not reach the remaining arguments raised by
Steverson.

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district court shall not enforce this putative settlement unless the evidence
demonstrates that it was made with Steverson having an informed
understanding of his rights and a full appreciation of the consequences of the
settlement. In making this determination, the court should be mindful of its
duty to “jealously protect” Steverson’s rights. Karim, 374 F.3d at 310. Further,
the court should bear in mind that the burden is on the party attempting to
enforce the settlement.
VACATED AND REMANDED.

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