Maritime employers that are liable for maintenance and cure payments to an injured seaman may seek contribution for those sums spent toward maintenance and cure from third-party tortfeasors. This is not a new or novel concept.
However, its recent reemergence in the Fifth Circuit Court of Appeals case of Poincon v. Offshore Marine Contrs., Inc., 9 F.4d 289 (5th Cir. 2021), presents an opportunity to discuss some interesting issues that deserve consideration from marine insurers and insureds.
The Poincon v. Offshore Marine opinion provides a relatively straightforward fact pattern concerning an individual's allegation of suffering successive offshore injuries and how that then affects certain obligations owed by her employer. In 2015, Sonia Poincon was working on an Offshore Marine liftboat when it was struck by a vessel operated by REC Marine Logistics. Ms. Poincon allegedly injured her neck following this collision. She did not seek maintenance and cure from Offshore Marine, her employer, for this alleged injury or any other medical treatment.
Ms. Poincon allegedly injured her neck again in a 2018 slip and fall on her employer's vessel. After the 2018 incident, Ms. Poincon sued Offshore Marine for Jones Act negligence, unseaworthiness, and maintenance and cure. In the same suit, she brought a negligence claim against REC in relation to the 2015 collision.
Offshore Marine then filed a third-party complaint against REC seeking contribution for the sums Offshore Marine paid in maintenance and cure for the 2018 injury, based on the premise that the 2015 collision was the underlying cause of Ms. Poincon's injuries. The district court granted an REC motion for summary judgment against Offshore Marine, concluding that the 2018 injury was not a foreseeable consequence of the 2015 collision and because the 2018 accident acted as an intervening and superseding cause of the injury.
In dismissing Offshore Marine's claim against REC, the district court fashioned its own new test for determining the lifespan of a maintenance and cure obligation after a seaman suffers injuries to the same body part in two separate incidents: a first accident's maintenance and cure obligation ends where a second accident's begins. Using this test, the district court found that REC's obligation to contribute to maintenance and cure ended once Ms. Poincon suffered a second accident for which REC was not liable.
On appeal, the Fifth Circuit rejected this new test and reversed the dismissal of Offshore Marine's contribution claim. In reviewing REC's motion for summary judgment, the panel reinforced the longstanding concept in the Fifth Circuit that a third party can be liable for contributing to an employer's maintenance and cure obligation to the extent that the third-party's negligence caused or contributed to the employee's injury and the need for maintenance and cure. 1 The maritime employer has the burden of showing that the third party was negligent, which, by necessity, includes a showing that the third party proximately caused the maintenance-and-cure-inducing incident. The third party may assert the affirmative defense of superseding cause, but that then shifts the burden of proof on causation to the third party.
The Fifth Circuit took issue with the district court's creation of a new and simplified bright-line test when a contribution and recovery structure that could benefit a Jones Act employer was already in existence. The panel also found problematic the idea that the new test would free a third party from its burden of proving the existence of a later cause of independent origin that was not foreseeable (i.e., a superseding cause). The mechanism already in place for obtaining contribution operated on simple negligence and causation standards; the new rule would have set those aside for a test that, while straightforward, was not found anywhere in prior circuit court jurisprudence.
The panel ultimately concluded the following.
In short, the district court erred by adopting its own new rule instead of analyzing REC's summary judgment motion according to governing Fifth Circuit precedent. When a third party injures a seaman in an initial accident and a subsequent accident then aggravates that injury, giving rise to the need for maintenance and cure, the subsequent accident raises the fact-bound question of the extent to which the initial accident caused the need for maintenance and cure. Under longstanding Fifth Circuit precedent, familiar tort principles of causation—including the affirmative defense of superseding cause—govern the result.
In addition to the above reaffirmation of the steps needed to obtain a contribution to a maintenance and cure obligation, the panel also held that Offshore Marine had presented enough evidence to raise a genuine issue of material fact on whether the 2015 REC collision was the proximate cause of the 2018 injuries for which maintenance and cure was paid. Thus, the district court's grant of summary judgment to REC was reversed and remanded.
The obligation to provide maintenance and cure to Jones Act seamen is almost axiomatic for employers and their maritime employers liability (MEL) insurers. 2 With jury verdicts and medical costs skyrocketing, employers and insurers should always be on the lookout for potential avenues to contribution for the costs they will end up owing for maintenance and cure. For example, marine personnel staffing companies that regularly send contract workers to countless jobs on various vessels are routinely hit with lawsuits or demands for maintenance and cure (despite arguments that they may not be a Jones Act employer) when one of their contract workers gets injured. The staffing company's MEL insurer ends up owing the vast majority of the medical costs.
It would benefit the employer and the insurer to review whether any other entity (the vessel owner, other service providers, etc.) caused or contributed to the employee's injury. Vessel owners should also review whether other service providers that were onboard caused or contributed to any injury suffered by the crew when reviewing its own maintenance and cure obligations. Such contribution could be only a percentage of the maintenance and cure cost (based on comparative fault principles), but it would be better than no contribution.
There appears to be a deep-seated belief in the marine industry that employers and MEL insurers are always 100 percent liable for paying maintenance and cure. The Poincon decision, though, provides insurers and insureds with the framework to explore potentially spreading the maintenance and cure risk between several alleged tortfeasors. This could, of course, lead to more subrogation claims (and litigation) between codefendants. But, the advantage would be that one party does not obtain a windfall merely because it did not employ or originally insure the injured employee.
However, this entire discussion could be hindered by smartly worded contractual indemnity agreements, whereby the employer is entirely responsible for—and must defend, indemnify, and hold other parties harmless for—injuries to its own employees. This scenario could then lead to a discussion (or contain the potential for disagreement) between the employer's MEL insurer (who is defending the employer and providing maintenance and cure) and the employer's general liability insurer (who could be providing defense and indemnity to the contractually indemnified third party) on where liability exists in regard to medical payments. This scenario could put the insured in a tough spot in between two of its major insurers.
Poincon did not change any policies, procedures, or guidelines in the Fifth Circuit. However, it did bring back to the forefront the possibility that maintenance and cure costs may not entirely be for the employer's account.
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