UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

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No. 93-7572

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IN THE MATTER OF THE COMPLAINT OF LIBERTY SEAFOOD, INC.

AS OWNER OF THE F/V GLORIA B FOR EXONERATION FROM AND OR

LIMITATION OF LIABILITY.

LIBERTY SEAFOOD, INC.,

Appellee,

VERSUS

HERNDON MARINE PRODUCTS, INC.,

Claimant-Appellant.

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Appeal from the United States District Court

for the Southern District of Texas

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(November 10, 1994)

Before HIGGINBOTHAM, JONES and BARKSDALE, Circuit Judges.

RHESA HAWKINS BARKSDALE, Circuit Judge:

One of the results of an allision, for which the crews of both

vessels were found at fault, was that seamen were injured on one

vessel and, therefore, received maintenance and cure; and the sole

issue is whether the shipowner/employer who made those payments has

a right to reimbursement from the other shipowner for part of those

payments, even though the latter settled with the seamen on their

damages claims. Herndon Marine Products, Inc., appeals from the

Rule 12(b)(6) dismissal of its claim against Liberty Seafood, Inc.,

for reimbursement of part of the maintenance and cure Herndon paid

its employees. Our holding that Herndon has stated a claim is

compelled by our very recent decision in Bertram v. Freeport Moran,
1 In response to Liberty's Rule 12(b)(6) motion to dismiss

Herndon's maintenance and cure reimbursement claim, Herndon stated

that it had paid approximately $105,000.

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Inc., No. 93-7575, slip op. 318 (5th Cir. Oct. 7, 1994).

Accordingly, we REVERSE.

I.

In the Gulf of Mexico in 1991, Liberty's vessel drifted into

Herndon's anchored vessel, causing damage to both and injury to the

three seamen aboard Herndon's vessel. Because of the seamen's

injuries, Herndon was required to pay them maintenance and cure.1

Liberty filed an exoneration and limitation action, pursuant

to 46 U.S.C. § 181 et seq., and Rule F, Fed. R. Civ. P.,

Supplemental Rules for Certain Admiralty and Maritime Claims. In

addition to responding to Liberty's claim, the injured Herndon

seamen filed claims against Liberty for negligence and

unseaworthiness; and Herndon filed claims against it for (1)

indemnity and contribution for the maintenance and cure and for the

costs of defending actions brought by the seamen, and (2) damages

resulting from the loss of use of, and damage to, Herndon's vessel.

Prior to trial, Liberty settled with the three seamen and each

of those claims was dismissed with prejudice. Pursuant to Fed. R.

Civ. P. 12(b)(6) (failure to state a claim), Liberty then moved to

dismiss Herndon's claims for indemnity and contribution, contending

that Herndon could not claim contribution from Liberty, a joint

tortfeasor, because Liberty had settled with the seamen. Herndon

responded, inter alia, that the claim for recovery over against

Liberty for maintenance and cure was separate and distinct from the
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settled claims with the seamen; and that, therefore, the settlement

bar rule was inapplicable. 

The district court denied Liberty's limitation claim, but

found the crews of both vessels at fault in the allision,

apportioning 75% to Liberty and 25% to Herndon. No finding was

made as to the percentage of fault, if any, attributable to each of

the injured (and dismissed) seamen. 

Thereafter, in ruling on Liberty's Rule 12(b)(6) motion

concerning Herndon's maintenance and cure reimbursement claim, and

because it did not feel there was controlling Fifth Circuit

precedent, the district court looked to the Eighth Circuit's

decision in Associated Elec. Coop. v. Mid-America Transp. Co., 931

F.2d 1266 (8th Cir. 1991), and held that the policies favoring

settlement dictated that Liberty's settlement should bar Herndon's

claim. Accordingly, it granted the motion. Subsequently, Herndon

and Liberty settled all other claims.

II.

As is well-established, we review de novo the Rule 12(b)(6)

dismissal, viewing all well-pleaded facts in the light most

favorable to Herndon. E.g., Cinel v. Connick, 15 F.3d 1338, 1341

(5th Cir.), cert. denied, 115 S. Ct. 189 (1994). For the reasons

stated hereinafter, Herndon has stated a claim.

Maintenance and cure are maritime terms describing a seaman's

right to receive food and lodging (maintenance) and necessary

medical services (cure). E.g., Davis v. Odeco, Inc., 18 F.3d 1237,

1245 (5th Cir.), cert. denied, 115 S. Ct. 78 (1994). It is firmly
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established in this circuit that a shipowner required to pay

maintenance and cure may recover those payments from a third-party

who caused, in whole or in part, the employee's injury. See

Bertram; see also, Adams v. Texaco, Inc., 640 F.2d 618 (5th Cir.

1981); Savoie v. Lafourche Boat Rentals, Inc., 627 F.2d 722 (5th

Cir. 1980); Tri-State Oil Tool Indus., Inc. v. Delta Marine

Drilling Co., 410 F.2d 178 (5th Cir. 1969). This right is not

extinguished where, as in this case, the shipowner is apportioned

part of the fault. Rather, that shipowner remains entitled to

contribution from the third-party tortfeasor in proportion to the

third-party's fault. Adams, 640 F.2d at 620-21.

Accordingly, but for Liberty's settlement with the seaman,

there would have been no dispute that Herndon had a right to

reimbursement of part of the maintenance and cure. At issue is the

effect, vel non, that the settlement has on that right. 

Liberty notes correctly this circuit's general rule against

claims for contribution by non-settling tortfeasors against

settling tortfeasors. Hardy v. Gulf Oil Corp., 949 F.2d 826, 835-

36 (5th Cir. 1992). However, in Bertram, our court distinguished

the traditional joint tortfeasor settlement case from maintenance

and cure reimbursement claims, and held that a settlement by a

third-party tortfeasor with an injured seaman does not bar a claim

by the seaman's employer for recovery over against that tortfeasor

for maintenance and cure. 

In Bertram, an employee of Energy Catering Services was

injured on a drilling platform while returning to the barge on
2 One of the other issues was whether Houma was required to pay

50% of the maintenance and cure, even though it was only 20% at

fault. Bound by precedent concerning an innocent (without fault)

employer, we held that it was. Savoie, 627 F.2d at 724.

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which he worked. Houma was a contractor on the platform, which was

owned by Freeport. The employee's several claims included one

against his employer, Energy, for maintenance and cure, and one

against Freeport and Houma for negligence. Prior to trial, the

employee settled with all parties, leaving, inter alia, Energy's

cross-claims against Freeport and Houma for maintenance and cure

reimbursement. The district court found Energy to be without

fault, and apportioned fault for Houma at 20%, Freeport at 20%, and

the employee at 60%. It ordered Houma and Freeport to each

reimburse Energy 50% of the maintenance and cure, not just their

portion of fault (20% each). Houma appealed, contending, inter

alia, that its settlement with Bertram should have barred recovery

over by Energy for maintenance and cure.2 

In affirming, we held that Adams (1981) and Savoie (1980) were

still binding precedent, notwithstanding the modern trend toward

proportional fault. Therefore, we reaffirmed that an employer's

claim for recovery over for maintenance and cure is separate and

distinct from an injured seaman's claim for damages. Bertram, No.

93-7575, slip op. at 329. Accordingly, we concluded that the

general settlement rule in Hardy, a case that did not involve

maintenance and cure, was not applicable. Id. at 326. Similarly,

we concluded that the Eighth Circuit's opinion in Associated
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Electric, although dealing with a reimbursement claim for

maintenance and cure payments, missed 

the critical distinction -- long recognized in this

circuit -- between an employer's right to recover

maintenance and cure payments, and one tortfeasor's

right to recover some or all of a damage award

assessed against it from another tortfeasor. 

Id. at 329.

As is well-known, maritime law provides two separate lines of

recovery for an injured seaman: damages, and maintenance and cure.

The seaman may claim maintenance and cure only from its employer;

but, as noted, the employer may recover all, or a portion, of those

payments from a third-party tortfeasor. See Adams, 640 F.2d at

620-21 (allowing recovery of proportionate share when employer

partially at fault); Savoie, 627 F.2d at 724 (allowing total

recovery when employer not at fault). The obligation of an

employer to pay maintenance and cure, which is based on its

employment relationship with the seaman, exists regardless of the

fault, vel non, of the employer. E.g., Aguilar v. Standard Oil Co.

of New Jersey, 318 U.S. 724, 730, 63 S. Ct. 930, 934 (1943);

Bertram, No. 93-7575, slip op. at 323; Brister v. A.W.I., Inc., 946

F.2d 350, 361 (5th Cir. 1991). 

As noted, in addition to maintenance and cure, an injured

seaman may also seek damages for negligence and unseaworthiness.

E.g., Cooper v. Diamond M Co., 799 F.2d 176, 179 (5th Cir. 1986),

cert. denied, 481 U.S. 1048 (1987). The damage claim may be

brought against the employer and a third-party tortfeasor. In

turn, through indemnity or contribution, the employer may recover
3 As noted, in the limitation action, the district court found

the crews of both vessels at fault. Liberty's crew was found 75%

at fault for, among other things, failing to properly anchor and

control their vessel. Herndon's crew was found 25% at fault for

failing to keep a proper lookout.

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from the third-party tortfeasor for part or all of any damages

assessed against the employer. See, Loose v. Offshore Navigation,

Inc., 670 F.2d 493, 499-500 (5th Cir. 1982). Thus, in a maritime

collision, a third-party tortfeasor faces two distinct claims by a

shipowner for contribution or indemnity: (1) for damages assessed

against the shipowner; and (2) for maintenance and cure. As

stated, Bertram holds that a settlement by the third-party with an

injured seaman on the damage claim will not bar the shipowner's

recovery of maintenance and cure. 

The holding in Bertram controls here, even though Herndon,

unlike the employer in Bertram, was found partially at fault. As

noted, our court held in Adams that the partial fault of the

shipowner does not preclude recovery for maintenance and cure from

a joint tortfeasor for its portion of the fault. Because Herndon

and Liberty were found 25% and 75% at fault, respectively, Herndon

has a claim against Liberty for 75% of the maintenance and cure.3

See Bertram, No. 93-7575, slip op. at 333.

Finally, as to any concern over the policy of favoring

settlements, once it is recognized that Liberty in fact had two

separate grounds of liability to the shipowner/employer, it becomes

clear that settlement policy is not implicated. Liberty cannot

extinguish its maintenance and cure liability to Herndon (a

separate and independent claim) by settling a separate and
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unrelated claim with the injured seamen. As discussed in Bertram,

No. 93-7575, slip op. at 328, public policy favoring settlements

should be advanced by Bertram's holding, because settlement of all

damages and maintenance and cure claims will be fostered, resulting

in the possible termination of all claims, and, hence, the

litigation.

III.

For the foregoing reasons the judgment of the district court

is REVERSED, and this case is REMANDED for further proceedings

consistent with this opinion.

REVERSED and REMANDED