Court Opinion

ID: 9447088
Source: CourtListenerOpinion
Date Created: 2023-08-03 22:24:56.616415+00
Date Added: 2024-06-11T17:30:53.458774
License: Public Domain

LUMBARD, Circuit Judge
(dissenting).
I would reverse the order of the district court as the facts and the law do not support Judge Noonan’s conclusion that International is estopped from recovering the amount of its compensation payments from Waterman Steamship Co., which it had duly notified.
There can be no doubt that under the Longshoremen’s and Harbor Workers’ Compensation Act, 33 U.S.C.A. § 901 et seq., International, as Mancino’s employer, was required by law to make payments to Mancino for medical expenses and compensation for loss of earnings following Mancino’s injury in the course of unloading the S.S. Bienville, a vessel owned by the Waterman Steamship Co., on April 23, 1951.
Subsequently, on January 21, 1952, Mancino filed an election to sue the defendant, Waterman, as the third person allegedly responsible for the injury, and, on February 1, 1952, action was commenced in the Supreme Court of Kings County. To this action, neither International nor its predecessor, Jarka Corporation, was ever a party. However, on February 8, 1952, Jarka advised Waterman in writing of its payments to Mancino and notified Waterman that it would look to it for reimbursement of these monies pursuant to the Longshoremen’s and Harbor Workers’ Compensation Act “in the event a judgment is rendered or a settlement made.”
Thereafter, on March 17, 1953, Man-cino’s action went to trial in the Supreme Court of Kings County. The Supreme Court justice, apparently exerting pressure on both sides to make a settlement, *19directed Waterman’s counsel to send word to Jarka to be in court the following morning “to discuss the problem of Jarka’s rights.” This word was conveyed to Jarka and Jarka refused to attend as it had a perfect right to do. What then followed is set forth in the affidavit of Waterman’s counsel, as follows:
“On March 19, 1953, deponent appeared at about noontime before Mr. Justice............at a continuation of the trial. Being advised that Mancino would accept $17,500 and Waterman would pay that sum, Mr. Justice ............ directed how the case was to be terminated. He directed that, in behalf of the defendant, deponent consent to the entry of judgment in favor of Man-cino for $17,500 without costs; that at the time of the entry of the judgment, deponent’s firm would be prepared to deliver up a check in payment of the judgment in the amount of $17,500; that, simultaneously with the entry of judgment, Man-cino’s lawyers would deliver up a satisfaction of the judgment. Mr. Justice ............ directed deponent, as a member of the bar of the court, to have no further communication, directly or indirectly, with The Jarka Corporation or any of its employees about the matter until after judgment had been entered and satisfied.” (Name of justice omitted.)
Waterman thereupon chose to follow the “directions” of the justice and a check for $17,500 in settlement of the case was turned over to Mancino in return for a satisfaction of judgment.
Judge Noonan has fittingly characterized the actions of the state court justice as “apparently improper activities of the trial court” and he further commented that these activities “put the defendant in an extremely awkward position vis-á-vis the plaintiff herein.”
It is well settled that International, to the extent of the payments made, is subrogated to any rights that Mancino may have against the third party for the injuries on account of which the payments were made. The Etna, 3 Cir., 1943, 138 F.2d 37; Fontana v. Pennsylvania R.R., D.C.S.D.N.Y.1952, 106 F. 461, affirmed 2 Cir., 1953, 205 F.2d 151, certiorari denied, 1953, 346 U.S. 886, 74 S.Ct. 137, 98 L.Ed. 390; Jarka v. Fireman’s Fund Indemnity Co., 1954, 286 App.Div. 148, 142 N.Y.S.2d 369, appeal denied, 286 App.Div. 1003, 145 N.Y.S.2d 313, appeal dismissed 309 N.Y. 909, 131 N.E.2d 908; 33 U.S.C.A. § 933(b). It is also settled that the employer may invoke this right either by intervening in the suit between the employee and the third party, The Etna, supra, or as here, by a separate action against the third party, Jarka v. Fireman’s Fund Indemnity Co., supra.
Obviously, the state court justice had no right to compel the presence of Jarka or to make any direction on the basis of Jarka’s failure to appear and Waterman does not even contend to the contrary. Waterman does argue, however, that it had virtually no alternative but to follow the state court justice’s directions. Of course, Waterman could not by any such decision nullify International’s rights under the statute. Waterman had the choice of resisting a court order and judgment which may have been rendered by reason of such resistance.
Of course, it is quite possible that Waterman felt that settling the case for $17,500 and running the risk of whatever obligation it might still owe to International was the best result which it could obtain. But it would seem clear to me that no matter what Waterman did, it could not destroy the claim any more than the state court justice could properly prevail upon Waterman or anyone else to effect a settlement so as to destroy International’s rights.
For these reasons, I would vote to reverse and remand with the direction to enter summary judgment for the plaintiff for reimbursement of $5,094.02 compensation payments regarding which International had sent notice to Waterman. *20However, since the merits of Waterman’s counterclaim against International for the $17,500 it paid Mancino have not yet been decided,1 ***I would also direct that Waterman need not pay over the $5,094.-02 to International until the counterclaim has been determined. Cf. Iravani Mottaghi v. Barkey Importing Co., 2 Cir. 1957, 244 F.2d 238, 260.

. Waterman’s counterclaim against International is based on a claim that International’s failure to perform properly its stevedoring contract caused Maneino’s injury and thus Waterman is entitled to the amount it paid Mancino, plus counsel fees, as the measure of damage flowing from this breach of contract. Cf. Weyerhaeuser Steamship Co. v. Nacirema Operating Co., Inc., 1958, 355 U.S. 563, 78 S.Ct. 438, 2 L.Ed.2d 491; Ryan Stevedoring Co., Inc. v. Pan Atlantic Steamship Co., 1956, 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133.