Opinion ID: 445258
Heading Depth: 2
Heading Rank: 1

Heading: Unfairness to Bass.10

Text: 19 Seamen, of course, are wards of admiralty whose rights federal courts are duty-bound to jealously protect. See, e.g., Garrett v. Moore-McCormack Co., 317 U.S. 239, 63 S.Ct. 246, 87 L.Ed. 239 (1942). We have long recognized that courts must be particularly vigilant to guard against overreaching when a seaman purports to release his right to compensation for personal injuries. See, e.g., Wink v. Rowan Drilling Co., 611 F.2d 98, 100 (5th Cir.) (releases or settlements involving seaman's rights are subject to careful scrutiny), cert. denied, 449 U.S. 823, 101 S.Ct. 84, 66 L.Ed.2d 26 (1980). 20 It does not follow, however, that a seaman may not compromise his rights without prior judicial approval of the fairness of the agreement. In other contexts, such as class actions, in which we closely scrutinize settlement agreements, a pending case may not be settled until the court determines that the settlement is fair. 11 See Fed.R.Civ.P. 23(e) (A class action shall not be ... compromised without the approval of the court....). Despite the solicitude with which we view the abdication of seamen's rights, we have never adopted a similar requirement in seamen's personal injury cases that district courts independently review the terms of settlement for fairness. 12 21 Our ultimate concern in these cases is not whether the seaman has received what the court considers to be adequate consideration for the rights he has relinquished; rather, we inquire whether the seaman relinquished those rights with  'an informed understanding of his rights and a full appreciation of the consequences' when he executed the release. Charpentier v. Fluor Ocean Serv., 613 F.2d 81, 84 (5th Cir.1980) (quoting Cates v. United States, 451 F.2d 411, 414 (5th Cir.1971)). The adequacy of consideration is simply a factor to be considered in determining whether the seaman had a full understanding of his rights and of the consequences of the settlement agreement. See, e.g., Garrett v. Moore-McCormack Co., 317 U.S. at 248, 63 S.Ct. at 252 (The adequacy of the consideration ... [is] relevant to an appraisal of this understanding [of a seaman's rights].); Wink v. Rowan Drilling Co., 611 F.2d at 100 (same); Strange v. Gulf & South American S.S. Co., 495 F.2d 1235, 1237 (5th Cir.1974) (seaman cannot avoid settlement merely because of the fact that plaintiff may have received considerably less for his injuries than at the end of a controversy he might reasonably have hoped to obtain) (quoting Harmon v. United States, 59 F.2d 372 (5th Cir.1932)). Rather than demanding prior judicial approval as a matter of course, we protect seamen's rights in the settlement context by requiring the proponent of a release that has been attacked to show that it was freely and knowingly executed. Garrett v. Moore-McCormack, 317 U.S. at 248, 63 S.Ct. at 252. 22 Applying these principles, we conclude that the district court exceeded its authority in voiding the rebate and veto provisions of this agreement because of perceived unfairness to Bass. A review of the district court's opinion reveals that the only finding with respect to the agreement's impact on Bass is that Phoenix did not pay adequate consideration for the rights that Bass relinquished. The opinion does not expressly reach what, in our view, is the ultimate question: did Bass fully understand his rights and the effect of the settlement on those rights when he executed the agreement? See Cates v. United States, 451 F.2d 411, 416 n. 14 (5th Cir.1971) (The controlling inquiry ... should be: Did the [proponent of the settlement] demonstrate that [the seaman] fully understood the consequences of his release?). 13 23 We do not intend to denigrate the court's role in protecting seamen from overreaching. Moreover, we recognize that the proponent of a seaman's settlement must demonstrate that it was freely and knowingly executed and that the burden of doing so is often more difficult when the agreement is based upon inadequate consideration. We simply hold that adequacy of consideration is not the touchstone of a valid seaman's release; absent a finding that the settlement was not executed with a full understanding of the seaman's rights and the effect of the agreement thereon, the district court lacks authority, especially where the seaman testifies to complete satisfaction, to void the agreement because the court thinks the seaman could have negotiated a better deal. 24 The district court's opinion does not discuss Bass' understanding of his rights or the effect of the agreement on those rights. The opinion does conclude, however, that Phoenix did not sustain its burden with respect to the agreement. Although the nature of the burden is not articulated, presumably the court was aware that the settlement proponent's burden is to demonstrate that the seaman acted with a complete understanding. At any rate, whether the court acted on the belief that inadequate consideration alone justified abrogation of the settlement 14 or from a conviction that Bass did not fully comprehend the consequences of the agreement, we cannot sustain the court's action. The former conclusion is an erroneous view of the law; the latter conclusion is an erroneous fact determination. 15 25 The record clearly demonstrates that Bass executed the agreement freely and knowingly, with a full understanding of his rights and the consequences of settlement; any implicit finding to the contrary in the district court's opinion is clearly erroneous. 16 The agreement itself is replete with warnings that the release of Phoenix is indeed a complete one. Moreover, the rebate and veto provisions of the agreement are set forth in plain and intelligible language. Bass was represented by counsel during negotiation and execution of the agreement. During his opening statement at trial, Bass' counsel extolled the benefits that the settlement agreement bestowed on Bass: The partial settlement was entered into by the Plaintiff freely and voluntarily and for reasons--financial reasons and other reasons, Your Honor. Since the settlement has been entered into the Plaintiff has bought him a mobile home and moved out to [live by] himself. He had lived with his sister and brother-in-law most of the time. Record Vol. III at 9. Moreover, Bass himself testified that the rebate provisions of the settlement were fully explained to him and that he willingly executed the agreement without reservation. 17 We note that, even though Bass has finally decided to attack the agreement for the first time on appeal, he still does not allege that he executed the agreement with an imperfect understanding of his rights or the consequences of settlement: his brief is limited to an attack on the adequacy of consideration; his counsel at oral argument again candidly admitted that both he and Bass completely understood the agreement at the time it was executed. While we acknowledge that representation by counsel does not perforce render a seaman's release enforceable, see, e.g., Blanco v. Moran Shipping Co., 483 F.2d 63 (5th Cir.1973), cert. denied, 416 U.S. 904, 94 S.Ct. 1608, 40 L.Ed.2d 108 (1974), the record is absolutely clear that Bass knowingly executed the release. We hold, therefore, that the district court erred in voiding portions of the agreement because they were, in the view of the court and the non-settling defendants, but not in the view of Bass or his counsel, unfair to Bass. 26