Published: December 23, 2013
By: Frederick B. Goldsmith
While deckhanding for Double J. Marine, LLC aboard its towboat, the M/V MISS KAYLYNN, Matthew Nuber seriously injured his back while pulling on a face wire. On the day of the accident, Nuber only had the benefit of an emergency room physician’s opinion, without any diagnostic testing, such as an x-ray or an MRI, that he had only pulled a muscle. One week later, Nuber returned to the ER where another physician released him to work full duty, still without any diagnostic testing, and without the opinion of a specialist, such as an orthopedic or neurosurgeon.
Later the same day, deckhand Nuber met with the vessel owner’s claims adjuster at a gas station and signed a “Receipt, Release, and Hold Harmless Agreement.” The adjuster read and explained the release to Nuber and Nuber signed the release, purportedly knowingly giving up all his claims against Double J for the shipboard accident. In exchange for signing the release, Double J paid Nuber only $860. Nuber returned to work for Double J the next day.
About one month later, Nuber’s back pain returned. Double J placed him on light duty, until Nuber could no longer continue to work. Then, Double J finally sent Nuber to see a back specialist, an orthopedic surgeon, who promptly ordered an MRI. The doctor diagnosed Nuber with herniated discs, recommended surgery, and opined the shipboard accident had caused the back injury. Nuber then demanded Double J pay him maintenance and cure under the general maritime law. Double J responded by filing this lawsuit, seeking a declaratory judgment that the release Nuber signed insulated it from Nuber’s claims. Nuber then filed a Jones Act negligence, general maritime law unseaworthiness and maintenance and cure lawsuit against Double J in state court.
In Double J. Marine, LLC v. Nuber, 2013 U.S. Dist. LEXIS 173408 (E.D. La. Dec. 11, 2013), U.S. District Judge Martin L.C. Feldman of the Eastern District of Louisiana denied Double J’s motion for summary judgment, finding there were fact issues as to whether the release was enforceable. Consistent with longstanding admiralty law, Judge Feldman discussed how the courts are charged with being protective of the rights of seamen:
“Seamen are wards of admiralty law, whose rights federal courts are duty-bound to jealously protect. … In protecting their rights, the Court must be ‘particularly vigilant to guard against overreaching when a seaman purports to release his right to compensation for personal injuries.’ … At the same time, however, the Court must balance the utility of maintaining confidence in the finality of such settlements. … In carefully scrutinizing releases or settlement agreements involving seamen, the Court must ultimately determine whether the seaman had ‘an informed understanding of his rights and a full appreciation of the consequences’ of executing the release at the time he executed it.”
Judge Feldman further wrote how the seaman’s employer bears the burden of proving the validity of a release, how the amount of money he or she is paid for the release is significant, as is the nature and extent of any medical and legal advice the seaman had available to him or her when signing the release:
“The party claiming that the matter has been settled bears the burden of demonstrating that a seaman’s release of claims was ‘executed freely, without deception or coercion, and that it was made by the seaman with full understanding of his rights.’ … Adequacy of consideration is one factor for the Court to consider in determining whether the seaman had an informed understanding of his rights. … However, the Court ‘lacks authority, especially where the seaman testifies to complete satisfaction, to void the agreement simply because the court thinks the seaman could have negotiated a better deal.’ … Another factor the Court considers in determining whether the seaman had an informed understanding of his rights is the nature of medical and legal advice available to him. … In this regard, a seaman ‘may have to take his chances’ that a properly diagnosed condition is ‘more serious and extensive than originally thought.’ … Other factors the Court considers include whether the parties negotiated at arm’s length and in good faith, and whether there is the appearance of fraud, deception, coercion, or overreaching.”
Here, Judge Feldman had to review competing versions of the gas station release signing: a transcript of the “ceremony” versus an affidavit from Nuber. He concluded the release could not be summarily enforced against Nuber. The Court’s analysis:
“Double J. contends that the record establishes that, at the time of releasing his rights, Nuber had an informed understanding of his rights and a full appreciation of the consequences. The Court disagrees. The record includes, on the one hand, a transcript of the meeting between Nuber and the adjuster in which Nuber indicated that he understood his rights and agreed to release them, and on the other, an affidavit executed by Nuber in which he swears he did not fully understand the ramifications of the release. That alone creates a genuine issue regarding whether Nuber executed the release freely and with a full understanding of his rights.”
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“The record also reveals that Nuber has only completed the 10th grade in special education classes, that he only received $530 in [new] consideration for settlement, and that he was not represented by counsel when he executed the release. ‘Although a court may uphold a release even when the seaman is not represented by his own attorney, [the Fifth Circuit] has repeatedly emphasized the importance of counsel in determining whether a seaman fully understood his rights and the consequences of releasing those rights.’ … Neither did Nuber receive an independent medical opinion regarding his injuries before executing the release.”
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“Double J. contends that the record clearly establishes that Nuber received adequate medical advice. The Court again disagrees. The record reveals that, before he signed the release, Nuber was treated twice at River Parishes Hospital where he was diagnosed with a pulled muscle and told to return to work. The emergency room physicians did not conduct any diagnostic testing, and did not refer Nuber to a specialist. When Nuber later sought more treatment, Dr. Nutik ordered an MRI, diagnosed Nuber with herniated discs, and recommended surgery. The record at least reveals a genuine issue regarding the adequacy of the medical advice Nuber initially received, if not a mutual mistake regarding the nature of Nuber’s injury.”
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“Finally, although Double J. maintains that the parties negotiated at an arm’s length and in good faith, the record shows that Nuber signed the release at a gas station on the very same day he received treatment. Double J. has failed to meet its burden of establishing that Nuber signed the release freely, without deception or coercion, and with a full understanding of his rights.”