Court Opinion

ID: 6036
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:12:25+00
Date Added: 2024-06-11T16:45:25.261472
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                          FOR THE FIFTH CIRCUIT

                               No. 92-7810

MARIENNE JACQUES, Individually,
and as Executrix of the Estate
of RICHARD L. JACQUES,
                                             Plaintiff-Appellant,

                                 versus

KALMAR INDUSTRIES, AB, ET AL.,
                                             Defendants,

                                 versus

HARTFORD ACCIDENT AND INDEMNITY CO.,
                                             Intervenor-Appellee.

          Appeal from the United States District Court
               for the Southern District of Texas

                          (November 22, 1993)
                      (                           )

Before POLITZ, Chief Judge,       HIGGINBOTHAM,       Circuit   Judge,   and
DAVIDSON*, District Judge.

HIGGINBOTHAM, Circuit Judge:

     Today, we decide that a workman's compensation carrier's right

to subrogation under the Longshore and Harbor Workers' Compensation

Act reaches its insured worker's recovery of punitive damages from

a third-party.

     *
        District Judge of the Northern District of Mississippi,
sitting by designation.
                                       I.

      Marienne Jacques sued Kalmar Industries AB, Kalmar LMV AB,

Kalmar, Inc., Strachan Shipping Company, and Alfred Allen Price for

the wrongful death of her husband, Richard L. Jacques. Mr. Jacques

was a marine surveyor who lived in Galveston, Texas. His employer,

World Marine Associates, Inc., sent him to work for Strachan at a

dockyard in Mobile, Alabama.       While working in Mobile, Mr. Jacques

was   struck   and   killed   by   a   forklift    manufactured   by     Kalmar

Industries and driven by Alfred Allen Price.           Hartford Accident &

Indemnity Company was the compensation carrier for World Marine,

pursuant to the Longshore and Harbor Workers' Compensation Act, 33

U.S.C. § 901 et seq.     Hartford began paying death benefits to Mrs.

Jacques.

      Mrs. Jacques filed suit in Texas state court.               Defendants

removed to the United States District Court for the Southern

District of Texas on the basis of diversity jurisdiction. Hartford

intervened to enforce its subrogation rights under the LHWCA. When

Mrs. Jacques settled with defendants Kalmar Industries and Strachan

for $750,000, Hartford sought reimbursement from the settlement for

the benefits it had already paid Mrs. Jacques and relief from

future benefits it might owe. Mrs. Jacques and Hartford both filed

motions for    summary   judgment      on   the   subrogation   issue.      The

district court granted judgment in favor of Hartford, allowing it

to recover its lien of $58,531.88 from the settlement proceeds and

relieving Hartford of its obligation to continue to pay benefits.

Mrs. Jacques appeals only the subrogation issue.           We AFFIRM.

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                                   II.

     Mrs.    Jacques   argues   that       the    LHWCA    affords    Hartford    a

subrogation right only for compensation that she might receive for

her husband's death.     The parties agree that Alabama law governs

Mrs. Jacques' claims against Kalmar Industries, Strachan Shipping

and Price.   Mrs. Jacques argues that, under Alabama law, her claim

was for punitive damages rather than compensatory damages; that her

settlement did not "compensate" her.             Hartford then, she says, has

no right to reimbursement from the settlement.

     Mrs. Jacques' argument rests on two pillars.                      First, she

asserts that Alabama law allows only punitive damages, and no

compensatory   damages   for    wrongful         death.     This     argument   has

considerable force.      We need not decide the matter, however,

because Mrs. Jacques must also persuade that the LHWCA does not

provide a subrogation right for reimbursement from a payment of

punitive damages, and we are not persuaded.

                                    A.

     Alabama law allows the spouse of a person killed as a result

of a wrongful act, omission, or negligence to recover damages.

Ala. Code § 6-5-410 (1993).       Alabama courts have described these

damages as punitive in nature.         See, e.g., Industrial Chemical &

Fiberglass Corp. v. Chandler, 547 So. 2d 812, 818 (Ala. 1988)

("damages recoverable in an Alabama wrongful death action are

punitive in nature") (citation omitted).                  There is uncertainty,

however, whether a payment for wrongful death should be considered

punitive in all contexts.       Id. at 824 ("I must view damages in

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wrongful death cases as something unique and as not punitive

damages qua punitive damages.") (Houston, J., concurring).                     Mrs.

Jacques   argues      that      regardless         of     any    uncertainty     in

categorization,      damages    for     wrongful        death   are   sufficiently

punitive to defeat subrogation of carriers of workers' compensation

insurance.

      Mrs. Jacques points to the subrogation rights of insurance

carriers under the Alabama state workers' compensation scheme. She

argues that it is only by explicit statutory authorization under

its   compensation     scheme    that        the   carriers     are   entitled   to

reimbursement for recovery for wrongful death. Ala. Code § 25-5-11

(1993).   Mrs. Jacques asserts that this provision is necessary

because the punitive nature of a recovery for wrongful death would

otherwise preclude reimbursement.             The argument is logical but, as

is so often the case, the reality is not so clear.                    The Supreme

Court of Alabama, in allowing an insurance carrier to recoup from

damages for wrongful death, did not explicitly address their

punitive nature.      See Maryland Cas. Co. v. Tiffin, 537 So. 2d 469,

474 (Ala. 1988) (allowing reimbursement for wrongful death without

discussing the punitive nature of the recovery).                 But here we stop

because, as we will explain, we find the LHWCA allows carrier

reimbursement from an award of punitive damages, and we need not

explore further the characterization of awards for wrongful death

under Alabama law.

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                                      B.

     We have not yet addressed whether a carrier of workers'

compensation insurance has a right to subrogate under the LHWCA

when the workers' third-party suit produces payment of punitive

damages.

     We    have   interpreted   the   LHWCA   to    allow   recovery   from a

judgment or settlement for both workers' compensation benefits

already paid and those yet to be paid.         Peters v. North River Ins.

Co., 764 F.2d 306, 312 (5th Cir. 1985).            We have further read the

Act to require similar reimbursement to an insurance provider from

a suit brought under an unassigned cause of action by an employee

as from a suit brought under an assigned cause of action by the

carrier of workers' compensation insurance.            See Hayden v. Kerr-

McGee, 787 F.2d 1000, 1004 (5th Cir. 1986) (refusing to vary

recovery under subrogation lien depending on whether employer or

employee brought action against third party).               Moreover, we have

declined to limit reimbursement of such an insurer based on the

nature of the employee's recovery.         See Hayden, 787 F.2d at 1003

(reimbursement to insurance provider depends on employee's total

award, not on percentage of actual loss employee recovered); Haynes

v. Rederi A/S Aladdin, 362 F.2d 345, 350 (5th Cir. 1966), cert.

denied, 385 U.S. 1020 (1967) (insurance provider entitled to

reimbursement from employee's recovery including compensation for

pain and suffering).     The organizing principle of these decisions

has been that the "insurer shall recover in full its payments from

the total recovery obtained by the injured workman from a third

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party defendant, regardless of what that recovery replaces or is

termed by the court."   Haynes, 362 F.2d at 350.   See also Hayden,
787 F.2d at 1003.   That Alabama deems recovery for wrongful death

to be punitive rather than compensatory in nature does not offer a

basis for limiting the application of this principle.       To the

contrary, Alabama's legislatively adopted policy of allowing an

insurer reimbursement from a recovery for wrongful death reflects

a policy choice similar to the one we find the Congress made with

the LHWCA.    At least one sister circuit has reached a similar

result.   In Force v. Director, Office of Workers' Compensation

Programs, 938 F.2d 981 (9th Cir. 1991), the Ninth Circuit allowed

reimbursement from a punitive damages award.       In doing so, the

court emphasized that the LHWCA does not distinguish between

different categories of damages.      The court found no reason to

protect punitive damages from an insurer's subrogation rights. Id.

at 984.   We join in this view.

     AFFIRMED.

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