Hicks v. Vane Line Bunkering, Inc.

13-1976-cv
Hicks v. Vane Line Bunkering, Inc.
UNITED STATES COURT OF APPEALS 1
FOR THE SECOND CIRCUIT 2
3
August Term, 2014 4
5
(Submitted: January 15, 2014 Decided: April 17, 2015) 6
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Docket No. 13-1976-cv 8
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CIRO CHARLES HICKS, 11
Plaintiff-Appellee, 12
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v. 14
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TUG PATRIOT, In Rem, 16
Defendant, 17
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VANE LINE BUNKERING, INC., 20
Defendant-Appellant. 21
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Before WINTER, STRAUB, and HALL, Circuit Judges. 25
26
Appeal from a denial by the District Court for the Southern 27
District of New York (Katherine B. Forrest, Judge) of appellant’s 28
motion to set aside a jury verdict. The jury found that 29
appellant willfully breached its maritime law maintenance and 30
cure obligations and awarded both compensatory and punitive 31
damages to appellee. Further, based on the jury’s finding of 32
willful misconduct, the district court granted appellee’s motion 33
for attorney’s fees. On appeal, we consider whether the district 34
court abused its discretion in finding that the record supported 35
the jury’s pain-and-suffering award, and whether a court may 36
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award both punitive damages and attorney’s fees in an action for 1
maintenance and cure. 2
Affirmed. 3
Paul T. Hofmann, Hofmann & 4
Schweitzer, New York, NY, for 5
Plaintiff-Appellee. 6
7
Michael D. Wilson, John J. Sullivan 8
and Caspar F. Ewig, Hill Rivkins 9
LLP, New York, NY, for Defendant- 10
Appellant. 11
12
WINTER, Circuit Judge: 13
Vane Line Bunkering, Inc. appeals from a money judgment for 14
Ciro Charles Hicks following a jury trial before Judge Forrest. 15
The jury found that appellant breached its maritime law duty of 16
providing maintenance and cure 1 following a shoulder injury Hicks 17
sustained while working on board the Tug PATRIOT. It awarded 18
Hicks the unpaid maintenance and cure and damages for pain and 19
suffering caused by the breach. Further, the jury found that 20
appellant’s conduct was willful and awarded punitive damages. 21
Finally, based on the jury’s finding of willfulness, the district 22
court granted Hicks’s motion for reasonable attorney’s fees. 23
Appellant argues that the evidence that appellant’s acts and 24
1“Maintenance and cure” refers to the well-settled doctrine of maritime
law that a seaman “injur[ed] in the performance of his duty is entitled to be
treated and cured at the expense of the ship.” The Osceola, 189 U.S. 158, 173
(1903), superseded by statute on other grounds, The Jones Act, 46 U.S.C. §
30104 (creating a statutory cause of action for negligence). Maintenance
includes a seaman’s living allowance and unearned wages. Gilmore & Black, The
Law of Admiralty § 6–12, at 267–68 (2d ed. 1975).
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omissions caused Hicks’s pain and suffering was insufficient as a 1
matter of law. Although it arguably waived the argument, 2
appellant also objects to the award of punitive damages in 3
addition to and/or in excess of the amount of attorney’s fees. 4
We affirm. 5
BACKGROUND 6
In light of the jury verdict for appellee, we view the trial 7
record in the light most favorable to him. See Kosmynka v. 8
Polaris Indus., Inc., 462 F.3d 74, 77 (2d Cir. 2006). 9
Hicks was employed by appellant as a deckhand on the Tug 10
PATRIOT. On April 21, 2009, while on deck handling heavy towing 11
gear, he injured his shoulder. Two days later, an orthopedist 12
diagnosed a possible rotator cuff tear. The doctor injected 13
Hicks with cortisone to relieve the pain and gave him a fit-for- 14
duty slip. Prior to returning to work, Hicks was required to see 15
a company doctor, who determined that Hicks was not fit for duty. 16
Subsequently, appellant confirmed in writing its obligation under 17
maritime law to pay sums for Hicks’s maintenance and cure, 18
reasonable medical expenses and maintenance costs until his full 19
recovery, maximum improvement, or until his condition was 20
declared permanent. 21
On July 1, 2009, Hicks underwent surgery on his shoulder. 22
He experienced significant discomfort before and after the 23
surgery. For several months following the procedure, he received 24
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in-office and at-home physical therapy while continuing to 1
experience significant pain. In December 2009, he informed his 2
treating physician that he still had significant limitations of 3
range of motion of his arm. 4
Appellant hired a private investigator to videotape Hicks 5
surreptitiously. The video captured him on videotape planting a 6
small tree and playing with his grandson. When Hicks’s doctor 7
requested funding for an additional MRI scan, he was shown this 8
footage and a document detailing the physical requirements of 9
Hicks’s job. Based on this video and the suggestion -- which 10
appellant now admits was false -- that Hicks’s job required only 11
light lifting, the doctor determined that Hicks was fit for duty. 12
Appellant accordingly informed Hicks that it would terminate 13
maintenance and cure payments effective May 9, 2010. 14
Beginning in August 2010, Hicks sought continuing care from 15
a second doctor, who diagnosed a recurrent rotator cuff tear. In 16
February 2011, this doctor recommended another surgery plus six 17
months of rehabilitation to repair the additional damage. Under 18
financial pressure caused by the meager maintenance and cure 19
appellant had paid him -- $15 per day compared to actual costs of 20
$69.67 per day for food and lodging -- and had now terminated, 21
Hicks returned to work while still injured. Severe financial 22
difficulties caused him to miss some of his physical therapy 23
appointments. During this time, his house was put into 24
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foreclosure, and he was unable to pay for health insurance. 1
In November 2011, Hicks brought the present action. His 2
claims were based on negligence under the Jones Act and the 3
maritime doctrines of unseaworthiness and maintenance and cure. 4
The jury found that appellant had not been negligent and the 5
PATRIOT was seaworthy, but that appellant had breached its 6
obligation of maintenance and cure by paying Hicks an 7
insufficient per diem and prematurely ceasing payments. 8
The jury awarded $77,000 in compensatory damages for past 9
maintenance and cure from April 22, 2009 to the date of the 10
verdict; $16,000 in future maintenance and $97,000 in future cure 11
through April 2013; and $132,000 in compensation for past pain 12
and suffering. The jury also found that appellant’s failure to 13
pay maintenance and cure was unreasonable and willful and awarded 14
$123,000 in punitive damages. Based on the finding of 15
willfulness, the district court, upon a motion under Fed. R. Civ. 16
P. 54(d), granted Hicks an additional $112,083.77 in attorney’s 17
fees. 18
Appellant moved, unsuccessfully, for judgment as a matter of 19
law or a new trial under Fed. R. Civ. P. Rules 50(b) and 59 20
respectively. This appeal followed. 21
DISCUSSION 22
We review a denial of a Rule 50(b) motion de novo and the 23
denial of a Rule 59 motion for abuse of discretion. See Fabri v. 24
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United Techs. Int’l, Inc., 387 F.3d 109, 119 (2d Cir. 2004); 1
Devlin v. Transp. Commc’ns Int’l Union, 175 F.3d 121, 131-32 (2d 2
Cir. 1999). With respect to attorney’s fees, because “resolution 3
of the district court’s grant of attorney’s fees implicates a 4
question of law, our review is de novo.” Garcia v. Yonkers Sch. 5
Dist., 561 F.3d 97, 102 (2d Cir. 2009). 6
We, therefore, consider: (i) the evidence underlying the 7
award of pain and suffering damages, and (ii) the award of both 8
punitive damages and attorney’s fees. 9
a) Pain and Suffering Damages 10
An injured seaman may recover damages if the shipowner’s 11
failure to pay maintenance and cure caused pain and suffering by 12
prolonging or aggravating the initial injury. See Vaughan v. 13
Atkinson, 369 U.S. 527, 539 (1962) (Stewart, J., dissenting); 14
Cortes v. Baltimore Insular Line, Inc., 287 U.S. 367, 371 (1932); 15
Williams v. Kingston Shipping Co., 925 F.2d 721, 723 (4th Cir. 16
1991) (discussing availability of “money damages for any 17
prolongation or aggravation of the physical injury”); accord 18
Hines v. J. A. LaPorte, Inc., 820 F.2d 1187, 1190 (11th Cir. 19
1987) (per curiam) (pain and suffering damages awarded where 20
failure to pay maintenance “aggravated Hines’ condition, 21
prolonged his pain and suffering, and lengthened the time 22
required for him to reach maximum cure”). 23
In arguing that the evidence was insufficient as a matter of 24
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law to support an award for pain and suffering, appellant relies 1
heavily on statements by Hicks that his condition did not 2
significantly improve after the initial injury. Appellant argues 3
from these statements that Hicks’s pain and suffering were 4
entirely attributable to the original injury and not to 5
appellant’s failure to fulfill its maintenance and cure duties. 6
However, under our caselaw, a plaintiff need not show an 7
additional discrete injury or illness resulting from the failure 8
to pay maintenance and cure. See Rodriguez Alvarez v. Bahama 9
Cruise Line, Inc., 898 F.2d 312, 314-15 (2d Cir. 1990) (duty to 10
furnish maintenance and cure continues until seaman fully 11
recovers). Rather, the prolonging or worsening of a condition as 12
a result of the employer’s breach will sustain a pain and 13
suffering damages award. See Messier v. Bouchard Transp., 688 14
F.3d 78, 84-85 (2d Cir. 2012) (duty to pay maintenance and cure 15
extends to aggravation of preexisting illness). And, in 16
maintenance and cure cases, “doubts regarding a shipowner’s 17
liability . . . should be resolved in favor of the seamen.” 18
Padilla v. Maersk Line, Ltd., 721 F.3d 77, 81-82 (2d Cir. 2013), 19
cert. denied, 134 S. Ct. 1309 (2014) (citing Atkinson, 369 U.S. 20
at 532). 21
In the present case, the jury could easily have found that 22
appellant’s discontinuation of maintenance and cure benefits 23
caused injuries to Hicks, both physical and otherwise. It could 24
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also have found that the insufficient payments forced Hicks back 1
to work before physical therapy could render him fit. Indeed, 2
Hicks’s second doctor diagnosed a recurrent rotator cuff tear and 3
determined the need for a second surgery, which would have 4
required yet another long bout of physical therapy. Furthermore, 5
Hicks suffered emotional distress stemming from the loss of his 6
home and health insurance, both of which could have been found by 7
the jury to have been caused, at least in part, by appellant’s 8
inadequate payments and discontinuation of benefits. See, e.g., 9
Sims v. U.S. of Am. War Shipping Admin., 186 F.2d 972 (3d Cir.), 10
cert. denied, 342 U.S. 816 (1951). 11
Although appellant attempts to cast the causation issue as 12
one of law, the causal link between the cessation of benefits and 13
the harms to Hicks for which damages are sought was for 14
determination by the jury. Based on the evidence, therefore, the 15
district court did not abuse its discretion in holding that the 16
jury acted reasonably in its award for pain and suffering. 17
b) Attorney’s Fees in Addition to Punitive Damages 18
In the district court, the parties did not squarely address 19
the issue of the amount of punitive damages recoverable in a 20
maintenance and cure action. However, because this issue is a 21
pure question of law, we may reach it regardless of waiver. See 22
Magi XXI, Inc. v. Stato della Città del Vaticano, 714 F.3d 714, 23
724 (2d Cir. 2013) (“[W]e have exercised our discretion to hear 24
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otherwise waived arguments . . . where the argument presents a 1
question of law and there is no need for additional fact- 2
finding.”)(internal quotation marks and citations omitted). 3
We perceive a need to address the issue here. The judgment 4
of the district court here is inconsistent with a decision of 5
another district court in this circuit. McMillan v. Tug Jane A. 6
Bouchard, 885 F. Supp. 452, 466 (E.D.N.Y. 1995) (holding that 7
punitive damages in maintenance and cure cases are limited to 8
reasonable attorneys’ fees). The conflict is the result of our 9
decision in Kraljic v. Berman Enter., Inc., 575 F.2d 412, 415-16 10
(2d Cir. 1978). That decision held that, in maintenance and cure 11
cases, the amount of punitive damages is limited to the amount of 12
reasonable attorneys’ fees. 13
As a result, we examine the decision in Kraljic, and the one 14
by the Supreme Court, Vaughan v. Atkinson, 369 U.S. 527 (1962), 15
that spurred it, in some detail. We also examine developments 16
after Kraljic, including a Supreme Court decision, Atlantic 17
Sounding Co. v. Townsend, 557 U.S. 404 (2009), that undermines 18
Kraljic. 19
Kraljic, 575 F.2d at 416, reluctantly concluded that 20
limiting punitive damages in maintenance and cure cases to 21
reasonable attorney’s fees was required by Atkinson. Atkinson 22
was a cryptic decision embodied in an opinion written by Justice 23
Douglas. It involved a shipowner’s failure to pay maintenance 24
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and cure, after which the ill seaman successfully sought damages 1
for the unpaid amounts and counsel fees for being forced to go to 2
court to remedy the owner’s breach. 3
Atkinson’s discussion of the attorney’s fees issue was all 4
of three paragraphs long and conflated the issues of compensatory 5
and punitive damages. Atkinson noted that the seaman’s claim for 6
attorney’s fees did not concern taxable costs; rather, it 7
involved “necessary expenses” incurred as a result of the owner’s 8
breach of duty, 369 U.S. at 530, i.e. being “forced to hire a 9
lawyer . . . to get what was plainly owed him,” id. at 531. 10
However, after this language, which clearly sounds in 11
compensatory damages, Kraljic, 575 F.2d at 413 (“This might lead 12
one to conclude that the award of attorney’s fees was 13
compensatory . . . .”), the Atkinson opinion then noted that the 14
owner’s conduct involved both the lack of any investigation into 15
the seaman’s claim and silence as to the claim’s merits. 369 16
U.S. at 530-31. The Atkinson opinion described this conduct as a 17
“recalcitrance” that was “callous,” “willful,” and “persistent.” 18
Id. This language was deemed by us to sound in punitive damages. 19
Kraljic, 575 F.2d at 414 (“Recovery of [attorney’s] fees is 20
therefore based upon the traditional theory of punitive 21
damages.”) 22
The dissenters in Atkinson argued that there was no basis 23
for an award of counsel fees as compensatory damages but that the 24
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conduct of the owner might support an award of “exemplary damages 1
in accord with traditional concepts of the law of damages.” 369 2
U.S. at 540. The dissent noted, however, that punitive damages 3
“would not necessarily be measured” by counsel fees but might 4
provide “indirect compensation for such expenditures.” Id. 5
Our decision in Kraljic read Atkinson to authorize punitive 6
damages in maintenance and cure cases but to limit such damages 7
to an award of reasonable attorney’s fees. Kraljic, 575 F.2d at 8
416. We did so reluctantly, believing that we were “constrained” 9
by Atkinson. Id. However, our rationale for reading Atkinson to 10
impose such a limit, as best we can determine at this distance in 11
time, was that Atkinson authorized an award of attorney’s fees 12
only where the owner’s conduct was sufficiently egregious to 13
justify a punitive award. Based on the Atkinson dissent’s view 14
that a punitive award, but not one measured by fees, was 15
available and our view in Kraljic that “[t]he seaman surely is 16
not entitled to separate awards of both [punitive damages and 17
fees],” id. at 414, we inferred that the Atkinson majority 18
authorized an award of punitive damages but limited it to 19
attorney’s fees. 20
Lost in this chain of reasoning was the fact that the seaman 21
in Atkinson sought only counsel fees and not punitive damages. 22
The Supreme Court majority, therefore, had no reason to consider, 23
much less discuss, the availability of punitive damages in excess 24
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of, or in addition to, counsel fees. While the dissenters did 1
mention punitive damages and the fact that they are not measured 2
by attorney’s fees, as described above, the majority ignored the 3
dissent. The inference that we appeared to have drawn from the 4
dissent, based in part on our view that separate awards of both 5
punitive damages and counsel fees would be impermissible, id., 6
was certainly not an inescapable interpretation of the cryptic 7
opinion in Atkinson. Indeed, Kraljic’s limitation of punitive 8
damages to counsel fees is an outlier, expressly rejected by some 9
courts, e.g., Hines, 820 F.2d at 1189, simply ignored by others, 10
e.g., Robinson v. Pocahontas, Inc., 477 F.2d 1048, 1051-52 (1st 11
Cir. 1973), and adopted by no one outside this circuit. We 12
conclude that it is no longer governing law in this circuit for 13
two reasons. 2
14
First, the landscape of Supreme Court caselaw has been 15
substantially altered since Atkinson and Kraljic. In Atlantic 16
Sounding, the Supreme Court held that punitive damages, as 17
traditionally available under the common law, are available in 18
claims arising under federal maritime law, including claims for 19
maintenance and cure. Atlantic Sounding, 557 U.S. at 424. It is 20
incontestable that traditional punitive damages are not limited 21
2We have circulated this opinion to all active members of this Court
prior to filing. See Shipping Corp. of India v. Jaldhi Overseas Pte Ltd., 585
F.3d 58, 67 & n.9 (2d Cir. 2009); see also Kramer v. Time Warner Inc., 937
F.2d 767, 774 (2d Cir. 1991).
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to the amount of attorney’s fees. Nowhere in the Atlantic 1
Sounding opinion is there the slightest hint that such damages 2
are limited to counsel fees. While Atlantic Sounding cited 3
Atkinson, id. at 417 -- seemingly relying more on the dissenting 4
than on the majority opinion -- it never stated or implied that 5
such a limit was contemplated, or was even an open issue left to 6
the future. We believe, therefore, that Kraljic’s holding did 7
not survive Atlantic Sounding. 8
The landscape has changed in another way that undermines 9
Kraljic. While that opinion relied heavily upon the 10
incompatibility of an award of punitive damages and a separate 11
award of counsel fees, see 575 F.2d at 414, the availability of 12
both punitive damages and attorney’s fees awards in the same 13
case, albeit for statutory violations but often on common law 14
grounds with regard to punitive damages, is today not uncommon. 15
See, e.g., Stanczyk v. City of New York, 752 F.3d 273, 275 (2d 16
Cir. 2014) (in Section 1983 case, the jury awarded plaintiff 17
compensatory damages and punitive damages, and the court 18
subsequently awarded attorney’s fees); Kolstad v. Am. Dental 19
Ass’n, 527 U.S. 526, 529 (1999) (“[P]unitive damages are 20
available in claims under Title VII of the Civil Rights Act of 21
1964.”); Farias v. Instructional Sys., Inc., 259 F.3d 91, 101-03 22
(2d Cir. 2001) (under Title VII, a plaintiff may be entitled to 23
reasonable attorney’s fees and punitive damages) (citing Kolstad, 24
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527 U.S. at 529); Feltner v. Columbia Pictures Television, Inc., 1
523 U.S. 343, 346 (1998) and 17 U.S.C. §§ 504, 505 (under the 2
Copyright Act, a court may “increase the award of statutory 3
damages to a sum of not more than $150,000" and may “award a 4
reasonable attorney’s fee”); Fort v. White, 530 F.2d 1113, 1118 5
(2d Cir. 1976) (under the Fair Housing Act, a plaintiff may be 6
awarded actual as well as punitive damages and attorney’s fees); 7
35 U.S.C. §§ 284, 285 (under the Patent Act, the court “may 8
increase the damages up to three times the amount found or 9
assessed” and may award “reasonable attorney fees”); accord 10
Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 11
F.3d 1337, 1347 (Fed. Cir. 2004) (in a patent infringement case, 12
under 35 U.S.C. § 285, “[t]hat there were not actual damages does 13
not render the award of attorney fees punitive. Attorney fees 14
are compensatory, and may provide a fair remedy in appropriate 15
cases.”); cf. Jurgens v. CBK, Ltd., 80 F.3d 1566, 1573 n.4 (Fed. 16
Cir. 1996) (“As a general rule, attorneys fees under [35 U.S.C. 17
§] 285 may be justified by any valid basis for awarding increased 18
damages under section 284. However, conduct which a court may 19
deem ‘exceptional’ and a basis for awarding attorneys fees may 20
not qualify for an award of increased damages. Even where 21
damages are increased under section 284, a court may decline to 22
award attorneys fees under section 285.”) (internal citations 23
omitted). 24
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Therefore, Atkinson’s holding that an award for attorney’s 1
fees may be made where the refusal to pay maintenance and cure 2
was “callous,” “willful,” and “persistent” is not inconsistent 3
with a punitive award. We also perceive no reason why Atkinson’s 4
holding that counsel fees are available for a willful breach of 5
an employer’s maintenance and cure obligations is not settled 6
law. Indeed, as noted, Atlantic Sounding cited Atkinson without 7
any hint of reservation as to the award of fees. 557 U.S. at 8
417. Moreover, Atlantic Sounding also cited, seemingly with 9
approval, a court of appeals decision affirming awards of both 10
punitive damages and fees in maintenance and cure cases. Id. at 11
408 (citing Hines, 820 F.2d at 1188). Pending further 12
developments in the Supreme Court, we follow those cases. 3
13
CONCLUSION 14
We therefore affirm. 15
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3We note one small departure from Atkinson. We believe that an award of
punitive damages is for the jury while attorney’s fees must be awarded under
Fed. R. Civ. P. 54(d), which was promulgated in 1993. This departure aligns
the award of fees in maintenance and cure cases with post-Atkinson practices
regarding fees. See Incandela v. Am. Dredging Co., 659 F.2d 11, 15 (2d Cir.
1981) (trial court assesses attorney’s fees after a jury finding that
defendant’s behavior was “callous” or “recalcitrant”).
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