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Maritime Update: Third Circuit Upholds Award of Attorneys Fees for Failure to Pay Maintenance and Cure

Jedd S. Malish - 

Stermer v. Archer-Daniels-Midland Co.,  — So.3d —- 2016 WL 718521 (La. App. 3rd Cir. 2/24/16).

Adrienne Sturmer filed suit against her employer, ARTCO, for injuries she sustained while working aboard M/V COOPERATIVE ENTERPRISES.  Sturmer sought  damages under the Jones Act for unseaworthiness of the vessel.  She further claimed that she was improperly dismissed, and that her dismissal constituted a retaliatory discharge by ARTCO. She further claimed that ARTCO unreasonably refused to pay her maintenance and cure after she was injured, and that she was thereby entitled to punitive damages and attorney fees.

After a bench trial, the trial court awarded Sturmer compensatory damages in the amount of $636,947.  The trial court also found that ARTCO’s failure to pay Sturmer maintenance and cure for a period of 2 ½ years was arbitrary and capricious.  Sturmer was awarded an additional $300,000 in punitive damages and $150,000 in attorneys’ fees.

ARTCO appealed the judgment.  The 3rd Circuit affirmed the trial court’s award of compensatory and punitive damages, but reversed the award of $150,000 in attorneys’ fees.  The issue of attorney fees for work performed in the trial court was remanded “to allow the trial court to receive evidence of what an appropriate award of attorney fees is in this case and to award attorney fees commensurate with said evidence.”  On remand, the trial court awarded Sturmer $309,174 in attorneys’ fees.  ARTCO appealed.

The Third Circuit affirmed the trial court’s award of attorneys’ fees.  ARTCO paid Plaintiff the outstanding maintenance and cure owed before trial.  ARTCO also stipulated that it would continue to pay maintenance and cure, but with a reservation of rights to contest the issue at trial. Plaintiff reached maximum medical cure on May 9, 2011.  At the time of trial in September of 2013, defendants’ had paid all outstanding maintenance and cure, which totaled approximately $56,000.  The trial court ruled that because ARTCO reserved its right to contest Plaintiff’s right to maintenance and cure, she was entitled to attorneys’ fees for work done in “proving up” the maintenance and cure claim at trial.  The Third Circuit found no manifest error in the trial court’s findings.

As to the $309,174 award of attorneys’  fees, the Court noted that “[W]hile it can be legitimately argued that allocation of time in this case is high, we are nevertheless constrained by the manifest error rule.”

This case again highlights the risks inherent in failing to properly investigate a seaman’s claim for maintenance and cure.  The court’s award of punitive damages and attorneys’ fees was over $600,000, nearly the amount awarded for compensatory damages.  This case is a stark reminder that seamen are viewed as wards of the admiralty courts and that all doubts regarding the payment of  maintenance and cure benefits are to be resolved in favor of the seaman.



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