Opinion ID: 350175
Heading Depth: 1
Heading Rank: 2

Heading: the award problem

Text: 16 The liability of the shipowner to the insurance carrier turns in part upon whether there was an award under the Act. The shipowner contends that since Melson received compensation voluntarily, without a formal award, then under 33 U.S.C. § 933(b), 933(d), and 933(h), 9 there was no assignment to the stevedoring co. and thence to the insurance carrier of Melson's rights against the shipowner to seek recovery for the personal injuries sustained by Melson. The insurance carrier contends: (1) that a formal award is not necessary under the Act all that is required is payment and acceptance of compensation; (2) that the various documents filed in this case 10 with the Bureau of Employees Compensation, U.S. Department of Labor, collectively constitute an award under the Act where the deputy commissioner has received and filed them; (3) that a voluntary settlement under analogous workmen's compensation laws constitutes an award; and (4) that the policy of the Act, designed to promote settlements, would be frustrated if a stevedoring company-employer was required to controvert every claim in order to protect its lien rights. While we agree in principle with the insurance carrier, our focus under 33 U.S.C. § 933(b) is somewhat broader than the position it asserts. 17 The key to the statutory assignment of rights created by 33 U.S.C. § 933(b) lies in the entire phrase: 18 Acceptance of such compensation under an award in a compensation order filed by the deputy commissioner or Board shall operate as an assignment to the employer . . . . 19 Two decisions and reference to parallel language regarding awards in various sections of the Act demonstrate that an award under a compensation order does not require formal entry of an award per se. Rather, the focus should properly be upon some act of ratification of compensation, whether formal or informal, and the subsequent acceptance of compensation by the claimant. 20 In Didier v. Crescent Wharf & Warehouse Co., 15 F.Supp. 91 (S.D.Cal.1936), a suit wherein the court was required to interpret the term compensation order as contained in 33 U.S.C. § 921(a), it was held that: 21 . . . the phrase 'a compensation order' in clause (a) of section 921, title 33, U.S.C.A., means any order relating to compensation, whether granting it or denying it. 22 15 F.Supp. 91, 93. Emphasis in original. 23 In Grasso v. Lorentzen, 56 F.Supp. 51 (S.D.N.Y.1944), aff'd, 149 F.2d 127 (2nd Cir. 1945), cert. denied, 326 U.S. 743, 66 S.Ct. 57, 90 L.Ed. 444 (1945), a case involving 33 U.S.C. § 933(b), the court was faced with a claimant who was injured while working as a stevedore and who had accepted compensation benefits from his employer's insurance carrier from the date of his injuries until approximately eleven weeks later. At this time, a dispute arose over the continued disability of the claimant. An informal conference was held by the claims examiner and he reduced his recommendations to memorandum form and placed them in the official file. The memorandum recommended, but did not require or approve, payment of additional compensation. Nevertheless, the insurance carrier paid the additional recommended sums and the claimant accepted them. 24 Thereafter, the claimant filed suit to recover damages for personal injuries and the defendant-shipowner argued that the suit was barred under 33 U.S.C. § 933(b) because the claimant had accepted compensation pursuant to a compensation order (the memorandum dictated by the claims examiner after the informal conference). The district court disagreed and the court of appeals affirmed holding that the placement of the claims examiner's memorandum in the file did not constitute an award in a compensation order because it was advisory and did not constitute official action. 25 The district court, having reviewed the legislative history behind § 933(b), stated that in order: 26 (t)o meet the requirements of Section 933(b), there must be an affirmative act or determination by the deputy commissioner. 27 56 F.Supp. 51, 54. Emphasis added. 28 Thus, some act, or some order, whether formal or informal, must occur in order for there to be a compensation award. Ibid. ; 149 F.2d 127, 128-9; see also: 1 Norris, The Law of Maritime Personal Injuries 3d § 95 at 172-3 (Lawyers Cooperative Publishing Co. 1975). 29 Parallel statutory language also supports the above interpretation of the compensation order-award issue. 33 U.S.C. § 921(d), also discussed by the court in Didier, supra, 15 F.Supp. 91, 94, refers to a compensation order as one which either rejects a claim or makes an award. Another section, 33 U.S.C. § 919(e), relating to the procedure for processing claims explicitly provides in part that: 30 (t)he order rejecting the claim or making the award (referred to in this chapter as a compensation order ) shall be filed in the office of the deputy commissioner, . . . 31 33 U.S.C. § 919(e). Emphasis added. 32 In this case, the numerous documents set forth above in footnote 10 all were duly received, filed and accepted by the deputy commissioner, Bureau of Employees Compensation, U. S. Department of Labor. Compensation payments were made and thereafter terminated pursuant to these documents. We hold that the documents set forth in footnote 10 above constituted sufficient affirmative action and a determination by the deputy commissioner granting benefits to Melson so as to constitute an award of benefits in a compensation order under 33 U.S.C. § 933(b) without the entry of a formal award. Melson's rights against third parties were assigned by operation of law to his employer, the stevedoring co., 33 U.S.C. § 933(b), and thereafter subrogated by operation of law to the insurance carrier. 33 U.S.C. § 933(h). 33 We believe this result is a logical one. A stevedore-employer should not be required to controvert every claim for compensation under the Act simply to ensure the entry of a formal award in order to preserve the statutory assignment and subrogation rights of the stevedore-employer and insurance carrier under 33 U.S.C. §§ 933(b) and (h). Such a requirement would frustrate the Act's time-honored purpose which was to eliminate the delay and expense incident to litigation, Wheeling Corrugating Co. v. McManigal, 41 F.2d 593, 595 (4th Cir. 1930), and cripple the congressionally explicit goal of prompt payment of claims that need not be controverted by employers. 33 U.S.C. § 914; 20 C.F.R. § 702.231. 11 On this point, the district court is affirmed.