Court Opinion

ID: 6922499
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:06:42.393713+00
Date Added: 2024-06-11T16:06:50.399193
License: Public Domain

CLARK, Circuit Judge
(dissenting in part).
I agree with all the affirmative award here upheld, but think my brothers definitely in error in ordering a deduction of $2,709.97 from the award on the basis *924of a limitation of ordinary “found,” or board and keep, to keep alone, because plaintiff is assumed to have a home ashore.1 Since the amount is small, comparatively speaking, it might be easily overlooked. But the issue appears to be a recurring one, and the principle is quite important. I think it requires more serious analysis than it has yet received before it becomes crystallized into an inflexible and unfortunate rule of law.
The deduction is held required on the authority of Conte v. Flota Mercante Del Estado, 2 Cir., 277 F.2d 664, 669-670. Actually it represents an extension of that case to new territory, for that dealt with the proper standard or yardstick to measure loss of future earning capacity, while here involved is the sum allowed by the district court for wages lost to the date of judgment. I find so much question about the Conte holding that I would certainly urge at least its contraction, rather than expansion. It is perhaps odd that my brothers cite Conte only in Section III of their opinion, dealing with wages already lost, and not in Section II, where they discuss loss of earning capacity. True, their discussion is consistent with Conte and becomes labored — in the endeavor to sustain a justified award — by the very fact that the uncited case appears to be exerting its restrictive influence. For in their analysis they computed only $750 per year as the value of food provided on the tug, whereas Judge Conger allowed $1,952 per year for found. Upon Judge Conger’s allowance (which I believe to be quite proper), it is easy to sustain the earning capacity award which my brothers are hard put to it to uphold. But thereafter, when they get to the lost wages item of their Section III, they order the deduction for board on the express and sole basis of Conte, contrary to the relevant authorities hereinafter cited prohibiting an exclusion of economic benefits received in addition to wages.
The ruling here deduced from the Conte case was there touched upon only briefly in a long opinion dealing with a plethora of issues concerning damages for a permanently injured seaman. It came up on the contention that the district court had overestimated board and lodging aboard ship at $2 per day (i. e., less than the $2.07 here allowed for food alone). Assuming such allowances to be proper on adequate proof, the opinion has little discussion and no citation of authority. As to lodging, its entire discussion is contained in this somewhat hesitant admonition to guide the trial judge on the remand: “It is not apparent that Conte’s lodging aboard ship had any pecuniary value since he was married and had two children and presumably was thus required to maintain a home in Buenos Aires in any event.” Conte v. Flota Mercante Del Estado, supra, 2 Cir., 277 F.2d 664, 670.
From the form of expression and the context it seems doubtful that the court was intending to lay down an inflexible and unchanging rule binding not only in-all cases of computation of lost earning capacity, but also in those covering actual wages lost, as my brothers here conclude.2' In any event, I do not believe the assumed *925principle can be supported in either case. Since both are here more or less involved, I shall discuss both, turning first to the proper criterion as to lost earning power.
As to this problem, the brief statement quoted from Conte would seem hardly applicable, for it appears to be geared to problems of reimbursement of expenditures made. It is anomalous when incorporated into a rule seeking to define a yardstick for measuring the loss of power to earn in the future. It is obviously relevant evidence for the future to consider what success the wage earner has already achieved in the economic struggle, and hence all the gains he has regularly earned or could probably earn are relevant. 4 Restatement, Torts § 924 and comment d (1939); 2 Harper & James, The Law of Torts 1316-1319 (1956). But chance factors of expense depending upon special circumstances of the moment hardly show a diminution of economic earning power, and, if considered, would suggest surprising anomalies. Thus a single man would be accorded greater earning power and greater loss than a married man with a home, while like preference would be shown a man who deserted his family or who foisted them on his relatives, and so on. There seems no justification for the deduction, even when the expenses of the home are actually proven and are not wholly nebulous as here.
The relevant authorities support this conclusion. There are no cases upholding the deduction. On the other hand, the current rule is well stated by Judge Medina for the court, thus:
“In the event of liability of the shipowner on the negligence and unseaworthiness claims the injured seaman is entitled to recover indemnity for his loss of earnings, past and prospective, for medical expenses reasonably incurred in the past and to be incurred in the future, and also an additional sum on account of his physical injuries and for pain and suffering. In many if not most cases, with some exceptions in the case of harbor craft such as ferries and tugs, the shipowner provides food and a place to sleep, roughly the equivalent of board and lodging ashore. As this board and lodging is part of the compensation earned by the seaman, it is well settled law that the calculation of loss of earnings, may be based upon his wages paid in cash, plus the economic gain arising from his receipt of board and lodging.”
Bartholomew v. Universe Tankships, Inc., 2 Cir., 279 F.2d 911, 916. It is to be noted that Judge Medina states this rule' generally and without any limitation based upon the seaman’s home life. And except for Conte—which he cites obviously for its bearing upon the general rule as to proof of lost earning power, rather than for this supposed exception—all the cases he cites support the same general statement. See McCarthy v. American Eastern Corp., 3 Cir., 175 F.2d 727, 728, certiorari denied 338 U.S. 911, 70 S.Ct. 349, 94 L.Ed. 561; Smith v. Lykes Brothers-Ripley S.S. Co., 5 Cir., 105 F.2d 604, certiorari denied 308 U.S. 604, 60 S.Ct. 141, 84 L.Ed. 505. See also Jacobson v. United States, D.C.W.D.Wash., 44 F.Supp. 685. In accord is Jones v. Atlantic Refining Co., D.C.E.D.Pa., 55 F.Supp. 17, 22. And highly significant is the analogy of the important cases cited in my next point below which refuse deductions from damage awards for receipts from collateral sources. I conclude as to this phase of the discussion that reduction of a lost-earning-capacity award for supposed home conditions of the wage earner is contrary to sound policy and precedent.
Turning now to the reduction of the award for lost wages to the date of trial, it is necessary first to note the anomaly of the result. Thus my brothers approve of the trial judge’s award of “found” from May 9, 1958, through August 25, 1959, as-maintenance and cure, but deny the lodging expense as a part of wages from August 26, 1959, to the date of judgment (taken as July 1, 1961). If sheer logic compels the deduction in the one case as *926unaecrued, why not in the other? I assume my brothers are not prepared to face the consequences in confusion and litigation which would result from upsetting the standard rate of $8 per day for maintenance and cure settled by agreement throughout New York Harbor (see note 4 of the opinion); but the reasons justifying leaving that part of the award untouched suggest like treatment in reason and fairness for the wage award.
Be that as it may, the precisely formulated rule of maritime damages stated above, which includes in the injured seaman’s award the economic value of the board and lodging to which he had been entitled before his injury, would seem to make the conditions of his home life ashore quite irrelevant to the issue of his ■loss. And that seems to me the clear teaching of the precedents I cite hereinafter. Indeed so clear does this seem to me that in the absence of any precise formulation of their views by my brothers I have difficulty in detecting the compulsion of their abbreviated argument. But apparently they find a logical necessity for the deduction they make in the thought that, since plaintiff maintained a home off the ship (as they assume), the provision of lodging was not an “added element of value” and hence could not be an economic gain within the rule above stated. This is a curious theory, and bears examining. This means that, as in Conte, determination of “economic value” for computation of damages would be made to turn on whether provision of lodging would affect plaintiff’s out-of-pocket costs; unless it would, the lodging would be held valueless. This must mean, as my brothers seem to admit, that if the seaman maintained no other home, so that were he not on shipboard his expenses would be greater, lodging on shipboard would be an added element of value and would constitute economic gain. This poses many questions.
First, it keys the determination of “value” to such a complex set of fortuitous circumstances that it would seem both unworkable and utterly unfair. For example, while a single seaman apparently receives “value” from the provision of lodging, would this be true if that same seaman normally lived at home and his parents provided him with free lodging? He incurs no out-of-pocket expense for lodging at all. Under the rule as now stated — going beyond the literal terms of Conte — this man must suffer the deduction. To work out all these distinctions depending on collateral circumstances among seamen who look, act, and are paid alike would require a separate trial itself for no sound reason of policy whatever. In fact, the application of the rule here suggests that these complexities will be resolved by the simple device of ignoring them, even if that compounds the inequities of the doctrine. My brothers have here created an absolute rule or irrebuttable presumption that married men with homes do not save a cent by virtue of shipboard lodging; hence their across-the-board reduction of the entire allowance for lodging. It is difficult to see how they can justify paying no heed to the economic facts of the case while applying a rule ostensibly based on economic realities.
But second, I have still stronger objections than these of practicality and fairness, however strong these may be. For the reasoning underlying this deduction of lodging seems to me directly at odds with the settled rule of law stated in 4 Restatement, Torts § 924, comment c (1939), that a plaintiff’s recovery for loss of earnings is “not reduced by the fact that the plaintiff has suffered no net financial loss as the result of the entire transaction, as where he receives insurance money or an amount equal to his lost wages from his employer or from a friend.” This rule directly rejects the notion that the measure of lost wages is limited to changes in plaintiff’s out-of-pocket costs. McCormick states clearly that net changes in plaintiff’s actual financial picture do not govern the measure of lost wages: “If the plaintiff’s employer continues to pay the plaintiff his wages or salary during his disability, as *927a gratuity, the plaintiff could hardly be said to have lost any wages, but this generosity ought not to lessen the amount which the wrongdoer should pay, and in these cases the courts have insisted that it is the ‘value’ of the plaintiff’s time that is the measure of his recovery.” (Emphasis supplied.) McCormick, Damages 310 (1935).
Applications of this important principle, often termed, rather ineptly, the “collateral source” rule — that compensation to an injured plaintiff is not to be reduced by payments to him because of the injury from a “collateral source” 3 — are numerous. See, e. g., United States v. Price, 4 Cir., 288 F.2d 448 (benefits under the Civil Service Retirement Act); Hudson v. Lazarus, 95 U.S.App.D.C. 16, 217 F.2d 344, certiorari denied 349 U.S. 968, 75 S.Ct. 906, 99 L.Ed. 1289 (medical and hospital services furnished by a veteran’s hospital); United States v. Harue Hayashi, 9 Cir., 282 F.2d 599 (social security benefits); United States v. Gray, 10 Cir., 199 F.2d 239 (hospitalization and medical treatment furnished by the defendant) ; and complete review of the cases in Plank v. Summers, 203 Md. 552, 102 A.2d 262 (hospital and medical care furnished by a naval hospital). Other cases and authorities are cited in United States v. Price, supra, 4 Cir., 288 F.2d 448, by Chief Judge Sobeloff, who points out (as cited cases show) that the defendant himself may be the “collateral source” from which the additional benefit comes; and see also cases collected in 15 Am.Jur. Damages, § 200; 13 A.L.R.2d 355; 19 id. 557; 52 id. 1451; 68 id. 877; 75 id. 885.
Hence I believe it clear that damages here must be measured by a yardstick unaffected by plaintiff’s actual net financial change, even if known. Out-of-pocket costs should not be the test, but only whether provision of lodging can be objectively considered to constitute economic gain. And quite obviously it can and does; just as it is gain for the single man, as my brothers admit, so it is gain for all. I would therefore affirm the award below in toto.

. There was no finding below on this issue; and the only evidence was plaintiff’s own testimony “I live in Staten Island,” and “Well, sometimes I wouldn’t get home for three weeks and sometimes, if we didn’t have too much work, we would tie up on a week end.” There was nothing bearing on the nature or ownership of the “home,” who lived there, its rental value, and the like. We learn collaterally from a motion for a preference in trial found in the record that plaintiff, his wife, and three minor children have been on relief, furnished by the Oity of New York, since October 1, 1960. While this shows that plaintiff has a family, it also suggests a doubt that be has a very plush “home.”' But the extensive assumptions here made without proof or findings and which are basic to my brothers’ argument are tome most surprising.

. If a principle thus cursorily announced! without supporting analysis or authority is to be permanently binding hereafter on the entire court, it means naturally that the broad and undefined generality lays a heavier band on future decisions-than does the carefully formulated and precedent-limite-S principle.

. See 2 Harper & James, The Law of Torts § 25.22 (1956), for discussion of the rule. As often in the law, a striking label may eventually confuse, rather than clarify, by lumping many things like and unlike together. The term becomes particularly inept where the defendant himself is the “collateral source,” as noted below in the text.