Aadland v. Boat Santa Rita II, Inc.

132 F.4th 33

• Court: Court of Appeals for the First Circuit
• Decided: March 17, 2025
• Docket: 24-1039
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

Nos. 24-1003 24-1039 MAGNUS AADLAND,

Plaintiff, Appellant/Cross-Appellee,

v.

BOAT SANTA RITA II, INC.,

Defendant, Appellee/Cross-Appellant,

BOAT SANTA RITA III, INC.; F/V LINDA; FRANCIS A. PATANIA; SALVATORE PATANIA, JR.,

Defendants.

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Denise J. Casper, U.S. District Judge]

Before

Barron, Chief Judge, Howard and Gelpí, Circuit Judges.

Scott W. Lang, with whom Catherine B. Kramer, Lang, Xifaras, & Bullard, Andrew B. Saunders, and Saunders & Saunders, LLP, were on brief, for appellant/cross-appellee. Joseph A. Regan, with whom Francis G. McSweeney and Regan & Kiely, LLP, were on brief, for appellees/cross-appellant.

March 17, 2025 BARRON, Chief Judge. This is the second appeal that we

have heard in this federal admiralty case. It arises out of a

2017 suit that a seaman, Magnus Aadland ("Aadland"), brought in

the United States District Court for the District of Massachusetts

against a fishing vessel's owner, Boat Santa Rita II, Inc.

("BSR II"), and related parties.

In the operative complaint, Aadland alleges that in 2014

he fell ill while working offshore on the owner's fishing vessel

and that he thereafter was owed a duty of maintenance and cure

that was not satisfied. The duty is owed by a vessel owner to a

seaman who falls ill or is injured while onboard a vessel at sea.

See Atl. Sounding Co. v. Townsend, 557 U.S. 404, 413 (2009)

(quoting The Osceola, 189 U.S. 158, 175 (1903)). For relief,

Aadland sought, among other things, compensatory damages for

unpaid maintenance and cure, compensatory damages for emotional

distress, and punitive damages as well as attorney's fees.

In the first appeal, we considered Aadland's challenges

to the judgment that the District Court entered against him

following a bench trial on his claims. By the time of the trial,

those claims were only against BSR II and Aadland's challenges

related solely to BSR II's alleged breach of its duty of cure, not

its duty of maintenance. We either vacated or reversed each of

the challenged portions of the District Court's judgment and

- 2 - remanded for further proceedings not inconsistent with our

decision.

On remand, the District Court entered judgment in favor

of Aadland in some respects and in favor of BSR II in others.

Aadland now appeals from that judgment, while BSR II cross-

appeals.

In issuing the judgment on remand, the District Court

first ruled that Aadland was entitled to cure on an ongoing basis

up to the point in time at which BSR II shows that Aadland has

achieved what is known as maximum medical recovery ("MMR"). That

is when the seaman who has suffered an on-ship illness or injury

"is 'so far cured as possible'" that the vessel owner at that point

no longer has an ongoing, continuous duty of maintenance and cure.

Whitman v. Miles, 387 F.3d 68, 72 (1st Cir. 2004) (quoting Farrell

v. United States, 336 U.S. 511, 518 (1949)).

The District Court next ruled that Aadland was not

entitled to compensatory damages for unpaid cure for the period

between the onset of his onboard illness in 2014 and the start of

the trial in September 2020. That was so, according to the

District Court, because BSR II's payment during that time of both

advances to Aadland and $400,000 to Aadland's private health

insurer had to be offset against any unpaid cure obligation that

BSR II may have had.

- 3 - In addition, the District Court ruled that Aadland was

not entitled to compensatory damages for emotional distress

resulting from any breach of the duty of cure by BSR II. And,

finally, the District Court ruled that Aadland was not entitled to

punitive damages or attorney's fees for any such breach.

Aadland does not challenge on appeal the District

Court's ruling that, due to BSR II's payments to him and his

private health insurer, he is owed no compensatory damages for

unpaid cure. However, insofar as the District Court's judgment is

unclear as to whether BSR II breached its duty of cure as of

September 2020, he contends, and we agree, that he is entitled to

judgment that such a breach occurred. He also challenges the

District Court's judgment denying both his request for

compensatory damages based on emotional distress and his request

for punitive damages as well as attorney's fees. We affirm the

portion of the judgment that denies the former request but vacate

the portion that denies the latter one.

As to the cross-appeal, we first consider BSR II's

challenge to the District Court's ruling that Aadland is entitled

to cure on a going-forward basis from September 2020 up to the

point in time at which BSR II can show that he has achieved MMR.

We then address BSR II's challenge to the District Court's ruling

that its $400,000 payment to Aadland's private insurer entitles it

to a setoff against its cure obligation of only that amount rather

- 4 - than $605,338.07, which it contends is the proper setoff amount.

We affirm the judgment issued by the District Court with respect

to both rulings.

I.

A.

Aadland filed his complaint in the District of

Massachusetts in 2017 against BSR II and four related parties:

Boat Santa Rita III, Inc., F/V Linda, Salvatore Patania, Jr., and

Francis A. Patania ("Patania"). A three-day bench trial began in

September of 2020.

By that time, only one defendant, BSR II, and two counts

from the original complaint -- Counts III and IV -- remained in

play. In Count III, Aadland sought compensatory damages for any

unpaid obligations that BSR II owed under the duty of maintenance

and cure. In Count IV, he sought both compensatory damages for

emotional distress caused by BSR II's failure to fulfill the

maintenance and cure duty that it owed prior to the start of the

trial and punitive damages as well as attorney's fees for that

same failure.

Although the duty of maintenance and cure is often

referred to as a single duty, it has two distinct

aspects -- "maintenance" and "cure." The duty of maintenance makes

the vessel owner responsible for "the provision of, or payment

for, food and lodging" for the ailing seaman. LeBlanc v. B.G.T.

- 5 - Corp., 992 F.2d 394, 397 (1st Cir. 1993). The duty of cure obliges

the vessel owner to pay "necessary health-care expenses . . .

incurred during the period of [the seaman's] recovery from an

injury or malady." Id.

B.

The District Court made the following findings of fact,

which neither party contests on appeal. Aadland served as the

captain of the F/V Linda, owned by BSR II, during a commercial

scalloping trip that left New Bedford, Massachusetts on July 9,

2014. Several days into the trip, while at sea, Aadland fell ill.

His condition worsened, and the F/V Linda reversed course and

traveled back to port.

An ambulance met Aadland upon arrival in New Bedford,

Massachusetts on July 18, 2014. He was transported to a hospital

and diagnosed with a group G Streptococcus infection. Aadland

spent much of the next six months, from July 18, 2014, to

December 29, 2014, receiving medical care at various inpatient

facilities. He was then discharged and received outpatient

treatment until July 9, 2015, when he was again admitted to the

hospital due to health complications that stemmed from the

infection.

Aadland was released from this second period of

hospitalization on September 10, 2015. He thereafter received

outpatient treatment for symptoms attributed to the infection.

- 6 - From the onset of the illness in July 2014 through

September 2014, Aadland received Tufts health insurance ("Tufts")

through GAF Engineering, the then-employer of his wife, Cynthia

Aadland. During that time, Tufts paid for the majority of

Aadland's care and BSR II reimbursed him for the out-of-pocket

medical expenses, $5,388.24 in total, that he submitted to BSR II.

Cynthia Aadland stopped working at GAF Engineering in

September 2014. From October 2014 through April 2017, Aadland was

covered by a Tufts Consolidated Omnibus Budget Reconciliation Act

("COBRA") continuation of health insurance plan, for which he paid

monthly premiums. Tufts continued to pay for the medical care

that he received as a result of his illness during that period.

In April 2017, he also obtained healthcare coverage through

Medicare.

From December 30, 2014, to October 16, 2020, Aadland was

paid maintenance of $84 per day by BSR II.1 By the time of the

trial, this maintenance amounted to $175,644. During this same

period, BSR II paid him "advances" of $114 per day. These advances

totaled $238,374. Additionally, Tufts accepted $400,000 from

BSR II in full satisfaction of any lien or claim that it might

have had against Aadland or Cynthia Aadland for coverage of

1 Aadland received the first payment from BSR II on February 5, 2015, backdated to and containing the amount owed by BSR II from December 30, 2014.

- 7 - Aadland's medical expenses. BSR II indicates that it made this

payment on the "eve of trial."

C.

The District Court entered its judgment in favor of

BSR II on October 16, 2020. It first determined that Aadland had

reached MMR by the time of the bench trial in September 2020.

Based on this ruling, the District Court determined that Aadland

was not entitled to maintenance or cure on a going-forward basis.

The ruling did not affect, however, any obligation that BSR II had

under either of those duties prior to the time of the trial.

With respect to BSR II's duty of maintenance up to

September 2020, the District Court ruled that BSR II had satisfied

that duty. The District Court did so on the ground that "[s]ince

February 5, 2015, [BSR II] has provided Aadland maintenance at the

same daily rate of $84.00." As to BSR II's duty of cure up to

September 2020, the District Court noted that "Aadland made no

request for cure from BSR II" prior to filing suit and that

"[t]here were no out-of-pocket medical expenses for Aadland that

BSR II declined to pay." The District Court then proceeded to

address Aadland's contention that, despite these findings, BSR II

failed to satisfy its cure obligation as of September 2020.

Aadland emphasized to the District Court the evidence in

the record that showed that Tufts -- and not BSR II -- paid for

the onboard-illness-related medical care that he had received

- 8 - prior to September 2020. He also emphasized the evidence in the

record that he argued showed that he secured insurance from Tufts

both through his wife's employment and, during the period in which

he had insurance through Tufts COBRA health insurance plan, his

own payment of premiums. Aadland argued to the District Court

that, under the Fifth Circuit's decision in Gauthier v. Crosby

Marine Service, Inc., 752 F.2d 1085 (5th Cir. 1985), these features

of the record showed that the duty of cure obliged BSR II to pay

for the costs of his healthcare related to his onboard illness up

to the start of the trial. That was so, he contended,

notwithstanding that Tufts had paid for the care. In pressing

this contention, Aadland described Gauthier to the District Court

as holding that "when medical care payments are made on behalf of

the injured seaman by a medical insurance policy provider which

the injured seaman has purchased separate and apart from the vessel

owner, the payments are not to be considered as being furnished at

no expense to the injured seaman."

The District Court ruled that Gauthier did not apply

because it was distinguishable on its facts. The District Court

explained that "[u]nlike the circumstances there which the [Fifth

Circuit] analogized to an instance where a shipowner disregarded

an injured seaman's maintenance and cure claim and then wanted to

set off any money earned by the seaman during the pendency of the

claim, there was no such refusal here." The District Court also

- 9 - determined that Aadland, unlike the seaman in Gauthier, had not

"incurred any medical expenses" for the cost of his care. That

was so, according to the District Court, because of both the

advance payments that BSR II had made to Aadland and the fact that

"[t]here are no outstanding medical expenses or reimbursements for

Aadland's medical care that Aadland is obligated to pay."

In that regard, the District Court pointed to its finding

that "Tufts has accepted $400,000.00 from BSR II in full

satisfaction of any lien or claim it might have against Aadland or

Mrs. Aadland for coverage of Aadland's medical expenses." It found

that, as a result of that payment, "Tufts has no claim or lien

against Aadland (or his wife) for medical expenses or

reimbursements" with respect to medical services provided prior to

September 2020 that related to Aadland's onboard illness.

The District Court went on to reject Aadland's request

for punitive damages and attorney's fees on the ground that "BSR II

has not withheld maintenance and cure payments." The District

Court added that "[t]o the extent that Aadland claims that the

timing of BSR II's payments to him were unreasonably delayed," it

"d[id] not agree on this record." It further explained that it

"d[id] not conclude that, even if there had been a showing of a

failure to pay maintenance and cure, Aadland has shown that BSR II

was callous, willful, or recalcitrant in such alleged failure."

- 10 - Finally, the District Court rejected Aadland's request

for compensatory damages for emotional distress arising from

BSR II's asserted failure to satisfy its duty of cure within the

period up to September 2020. The District Court concluded that it

"d[id] not need to reach [Aadland's claim for emotional distress

damages] because of Aadland's failure to show that BSR II was

callous, willful or recalcitrant" in any breach of the duty of

maintenance and cure.

D.

Aadland appealed. He contended that the District Court

erred in: (1) ruling that BSR II had satisfied its duty of cure up

to September 2020; (2) denying his request for punitive damages

and attorney's fees; (3) denying his request for compensatory

damages for his alleged emotional distress arising from BSR II's

asserted failure to satisfy its duty of cure in a timely manner

during the period up to September 2020; and (4) ruling that he had

achieved MMR as of September 2020, such that BSR II had no going-

forward duty of cure from that date.

We reversed the District Court's ruling that Aadland had

achieved MMR as of September 2020. Aadland v. Boat Santa Rita II,

Inc. (Aadland I), 42 F.4th 34, 37-38 (1st Cir. 2022). We vacated

the District Court's ruling that, as of September 2020, BSR II had

satisfied its duty of cure up until that time. Id. at 37.

- 11 - In explaining our reasons for vacating the latter

ruling, we noted that the District Court "did not purport to take

issue with" either Gauthier or Aadland's account of it. Id. at

44. We also noted that we understood the District Court to have

based its ruling on the determination that Gauthier was factually

distinguishable. Id. We then further explained that we understood

the District Court to have distinguished Gauthier, at least in

part, based on its finding that "Aadland failed to request cure as

the seaman in [Gauthier] had." Id. at 44.

We determined that this aspect of the District Court's

reasoning was problematic. Id. We did so on the ground that

Aadland's failure to have made such a request could not provide a

valid ground for distinguishing Gauthier on its facts, given that

BSR II did not dispute that Aadland had no obligation to request

cure. Id.

We then addressed BSR II's argument that we could

nonetheless affirm the District Court's determination that

Gauthier was distinguishable on its facts. Id. at 45.

Specifically, BSR II contended that, unlike the seaman in

Gauthier, Aadland did not "alone purchase[] [his] medical

insurance," thereby precluding him from benefitting from

Gauthier's holding. Id. (alterations in original) (quoting

Gauthier, 752 F.2d at 1090).

- 12 - BSR II based this contention in part on the fact that

Aadland's wife helped him purchase the health insurance in

question. Id. We explained that "we [were] not persuaded by

[BSR II's] implicit assertion that the use of one spouse's paycheck

to fund the insurance of the other is necessarily a 'gift' from

the one to the other in the same way that perhaps a parent paying

the premiums of an adult child might be viewed." Id. at 45-46.

We recognized that, ordinarily, a seaman who receives

financial support from a parent or a wealthy relative to pay for

medical care does not "incur" for the purposes of cure the expenses

that were covered by that financial support. Id. at 45 (first

citing Johnson v. United States, 333 U.S. 46, 50 (1948); and then

citing In re RJF Int'l Corp., 334 F. Supp. 2d 109, 113 (D.R.I.

2004)). But we concluded "that the nature of the relationship

between the seaman and the person providing financial assistance

to him matters." Id. at 45. We then explained that, "given that

it is not unusual for a married couple to share finances," the use

of a spouse's resources differs materially from the use of funds

provided by a parent or wealthy relative. Id. at 45-46.

Accordingly, we held that neither Aadland's receipt of coverage

from his wife's employer nor his paying for the coverage with

financial resources that he shared with his wife showed that

Aadland did not "alone purchase" his health insurance. Id. at 46.

- 13 - We also addressed an additional ground that BSR II

advanced for concluding that Aadland did not "alone" pay for the

health insurance and thus for our affirming the District Court's

determination that Gauthier was factually distinguishable. In

pressing this ground, BSR II relied on the fact that, as recognized

by the District Court, it provided Aadland with "advances" that he

used, at least in part, to pay the relevant insurance premiums to

the insurer, Tufts. Id. at 46-47.

In rejecting this basis for distinguishing Gauthier on

its facts, we explained that Gauthier held that "where a seaman

has alone purchased medical insurance, the shipowner is not

entitled to a set-off from the maintenance and cure obligation

moneys the seaman receives from his insurer." Id. at 44 (quoting

Gauthier, 752 F.2d at 1090). In other words, we explained that

Gauthier stands for the proposition that if a seaman independently

purchases medical insurance and uses that insurance to pay for

medical care that is covered by the duty of cure, then the seaman

may be said to have "incurred" the cost of his care as billed to

the insurer for the purposes of cure, such that the seaman may

recover that amount, less any setoffs, from the vessel owner. Id.

at 44-48; see Gauthier, 752 F.2d at 1090. We then further

explained that, based on that understanding of Gauthier, "Aadland

would have been in all relevant respects 'abandon[ed] . . . to his

fate'" insofar as BSR II had extended the advances to Aadland only

- 14 - as loans. Aadland I, 42 F.4th at 46-47 (alterations in original)

(quoting Dutra Grp. v. Batterton, 588 U.S. 358, 375 (2019)). We

also "emphasize[d], if [Aadland] did alone purchase th[e]

insurance" -- as would be the case if the advances were

loans -- "then [BSR II] would not be entitled to set off from their

cure obligation the roughly $600,000 . . . that Aadland's medical

providers received from [Tufts] as payment for their treatment of

his on-ship illness." Id. at 47-48.

We ultimately concluded that it was not clear from the

record whether the advances that BSR II paid to Aadland did

constitute loans. Id. We also noted that the District Court did

not make a finding as to whether the advances were loans or not.

Id. at 46. Thus, we vacated the District Court's judgment to

BSR II on Aadland's breach-of-the-duty-of-cure claim and remanded

for further proceedings not inconsistent with our decision. Id.

at 47.

Before concluding our analysis of whether BSR II had

breached its duty of cure as of September 2020, though, we chose

to address "the question as to what the proper measure of cure is"

for the period up until that time. Id. at 48. We explained that

it was important to do so because this question could be relevant

on remand. Id.

We acknowledged Aadland's contention that the proper

measure of cure is "the 'sticker price' of the healthcare that he

- 15 - received, which is $1.2 million." Id. Nonetheless, we agreed

with BSR II that "Gauthier never resolved how much cure the

shipowner there owed the seaman," id., and that Manderson v. Chet

Morrison Contractors, Inc., 666 F.3d 373 (5th Cir. 2012), a later-

decided case from the Fifth Circuit, did. Manderson held, as we

characterized it, that:

[W]hen a seaman alone purchases his medical insurance, such that Gauthier's no-set-off rule applies, "the relevant amount" owed as cure is not the "sticker price" the healthcare providers assign to the care that they provided to the seaman to treat his on-ship illness or injury. Rather, "the relevant amount is that needed to satisfy the seaman's medical charges," which there was the "lower amount paid by [the seaman's] insurer."

Aadland I, 42 F.4th at 48-49 (second alteration in original)

(quoting Manderson, 666 F.3d at 382).

Accordingly, we concluded that, "insofar as Gauthier

does apply . . . . [and] insofar as Aadland did alone purchase the

insurance in question, . . . the cure owed here is the roughly

$600,000 that his healthcare providers accepted as payment for his

care from his insurer." Id. at 50. We therefore rejected

Aadland's contention that the measure of cure under Gauthier was

double that amount. Id.

In addition, we identified various issues for the

District Court to address on remand with respect to the duty of

cure. Specifically, we left to the District Court the assessment

- 16 - of whether Gauthier's reasoning should be adopted; whether Aadland

had paid for his insurance "alone" with respect to his medical

care for his onboard illness, and thus whether, if Gauthier were

adopted, it would apply on these facts; whether the advances that

Aadland received from BSR II up to September 2020 were loans; what

cure was paid by BSR II up until that time; and whether BSR II had

satisfied its cure obligation as of September 2020. Id. at 50-

51.

Finally, we turned to Aadland's challenge to the

District Court's rulings in BSR II's favor as to his request for

compensatory damages for emotional distress and his request for

punitive damages as well as attorney's fees. Id. at 52. We

observed that "the District Court's judgment in this regard relied

on its determination that Aadland was not deprived of any cure

owed to him by [BSR II] because Gauthier did not apply." Id.

Because we ruled that this determination rested on an erroneous

legal basis, we vacated those portions of the District Court's

grant of judgment to BSR II. Id.

E.

On remand, the District Court "solicited the parties'

proposal for a new schedule, considered supplemental briefing from

the parties on the outstanding issues, heard oral argument and

took the matter under advisement." The District Court issued its

decision in December 2023.

- 17 - As to whether Aadland had reached MMR by September 2020,

the District Court considered evidence from BSR II that had not

been at issue in Aadland's appeal from the District Court's prior

judgment. Despite considering this evidence, the District Court

ruled that BSR II had not met its burden to prove that Aadland had

reached MMR as of September 2020.

The District Court then turned to Aadland's breach-of-

the-duty-of-cure claim. It framed the issue on remand as requiring

that it determine "the measure of BSR II's cure obligation as of

September 2020 and whether that obligation is offset by any

payments already made."

The District Court first determined that the "cure

obligation is $605,338.07, the amount that Tufts paid to Aadland's

medical providers." It thus rejected Aadland's contention that

the cure obligation was the roughly $1.2 million that the medical

providers originally billed Tufts.

As to "whether that obligation is offset by any payments

already made," the District Court concluded that Gauthier would

"guide [its] analysis," such that "Aadland should be entitled to

recover his medical expenses, even though they were paid for by

Tufts, so long as the insurance was not gifted to him by a third

party, but rather a reasonable expense paid out of his shared

finances with his wife." Based on this understanding of Gauthier,

the District Court went on to rule that "BSR II may not offset its

- 18 - cure obligation with the [funds] Tufts paid to satisfy Aadland's

medical bills."

In so concluding, the District Court rejected BSR II's

contention that its payment of advances to Aadland meant that

"Aadland did not pur[chase] his insurance alone such that the

Gauthier analysis would not apply." The District Court noted that

"BSR II itself did not purchase or provide health insurance on

Aadland's behalf" and "did not require Aadland to spend the

advances on health insurance as opposed to other necessities or

incidentals." It continued, finding that "though BSR II's

insurance broker included the health insurance premiums in his

calculation of the appropriate maintenance and advances due to

Aadland, BSR II did not communicate to Aadland any intent that the

advances be used for health insurance." The District Court thus

found that Aadland paid for his health insurance alone, although

it did so without determining whether the advances were loans.

The District Court went on to explain, however, that

Aadland did not dispute that BSR II's $400,000 payment to Tufts

"should be credited towards its cure obligation." It then

determined that, as a result, that payment applied as a setoff in

favor of BSR II against its roughly $600,000 cure obligation as of

September 2020.

The District Court next addressed the import of the

advances that BSR II had paid to Aadland, and it explained that

- 19 - "[a]lthough . . . BSR II's advances did not reduce its cure

obligation in the first instance, the advances remain relevant to

what amount BSR II now owes Aadland." The District Court noted

that each advance had a receipt, signed by Aadland, and that each

receipt stated the payment was an "ADVANCE toward any settlement,

judgment or award resulting from my claim for personal injuries or

illness occurring on or about 7/20/2014 while aboard the F/V

LINDA." It then concluded that it "must enforce the terms of this

contract between Aadland and BSR II, which provides that any future

judgment against BSR II be reduced by the amount of the advances

paid."

Thus, the District Court credited not only the "$400,000

payment to Tufts" that BSR II had made but also the "$238,374.00

in advances paid" by BSR II to Aadland against the $605,338.07

that it determined was owed as cure. In consequence, the District

Court found that BSR II had a "$33,035.93 . . . credit against any

continuing cure obligation . . . after September 2020," as BSR II

had paid Aadland more than he was owed as cure.

Finally, the District Court ruled that Aadland was not

entitled either to damages for emotional distress or to punitive

damages as well as attorney's fees based on BSR II's asserted

breach of its duty of cure as of September 2020. It based these

rulings on grounds independent of whether BSR II had breached the

duty of cure.

- 20 - This timely appeal by Aadland and cross-appeal by BSR II

followed.

II.

"When a district court conducts a bench trial, its legal

determinations engender de novo review," as do its "determinations

about the sufficiency of the evidence." United States v.

15 Bosworth St., 236 F.3d 50, 53 (1st Cir. 2001). A district

court's factual findings are reviewed for clear error. See id.;

see also Fed. R. Civ. P. 52(a)(6).

A district court's resolution of mixed questions of law

and fact is typically treated with deference. Vinick v. United

States, 205 F.3d 1, 6 (1st Cir. 2000). But, if the district court

"'premise[s] its ultimate finding . . . on an erroneous

interpretation of the standard to be applied,' . . . . we treat

the trial court's conclusion as a question of law," entitled to no

deference. Id. at 7 (first alteration in original) (quoting United

States v. Parke, Davis & Co., 362 U.S. 29, 44 (1960)).

III.

On appeal, Aadland does not dispute the District Court's

rulings that credit BSR II's payment of both the advances to him

and the $400,000 to Tufts as setoffs against any liability that

BSR II owed for any breach of its duty of cure prior to September

2020. Aadland nonetheless contends that, notwithstanding those

rulings, the District Court did not rule one way or the other as

- 21 - to whether BSR II had in fact committed such a breach. Aadland

then goes on to contend that he is entitled to judgment that this

breach occurred.

This contention matters to Aadland's appeal even though

he is not contesting the District Court's ruling on remand that,

based on the setoffs, BSR II owed him no compensatory damages for

any unpaid cure as of September 2020. After all, Aadland is

challenging the portions of the District Court's judgment that

denied his requests for compensatory damages for emotional

distress and punitive damages as well as attorney's fees, and a

premise of each of those requests is that BSR II breached its duty

of cure as of September 2020.

Although BSR II agrees with Aadland that the District

Court did not pass on the breach issue one way or the other, we

see no reason to remand for the District Court to resolve the

breach issue in the first instance. This is the second appeal in

this case, Aadland has fully briefed the issue in this appeal,

BSR II has directly responded to that briefing, and Aadland is

contending that this record compels the finding that the breach

occurred. We thus begin our analysis of Aadland's appeal by

addressing the breach issue.

Moreover, because, as we will explain, we conclude that

the breach issue must be resolved in Aadland's favor, we also

proceed to address his challenges to the portions of the District

- 22 - Court's judgment denying his request for compensatory damages for

emotional distress and his request for punitive damages as well as

attorney's fees. For the reasons set forth below, we affirm the

District Court's judgment insofar as it denies the former request

but vacate the judgment insofar as it denies the latter.

As to the breach issue, Aadland argues that BSR II

breached its duty of cure as of September 2020 because it "untimely

and partially paid its cure obligation." In advancing this

argument, Aadland points to unchallenged findings below that

establish that Tufts -- his private medical insurer -- paid for

the care that related to his onboard illness. Aadland also points

to both the District Court's finding that he paid for his insurance

coverage from Tufts "alone" and the District Court's determination

that, in consequence, BSR II owed cure under Gauthier as of

September 2020 in the amount of the roughly $600,000 that the

private insurer paid for his care. Aadland then contends that he

is entitled to judgment that BSR II breached its duty of cure

because the record clearly shows both that BSR II failed to pay

adequate cure as of September 2020 and that, insofar as the record

- 23 - shows that BSR II ultimately did pay the total amount of cure that

it owed as of then, it paid such cure in an untimely manner.2

In responding to Aadland's contention on appeal, BSR II

does not dispute the District Court's determination that BSR II

owed cure to Aadland due to his onboard illness. It also does not

dispute that the proper measure of its cure obligation as of

September 2020 is the $605,338.07 that Tufts had paid healthcare

providers for Aadland's care. Finally, it does not take issue

with the District Court's decision to rely on Gauthier to arrive

at this now-undisputed measure of BSR II's cure obligation as of

September 2020, even though our prior decision in this case did

not hold that Gauthier necessarily did apply here. Nonetheless,

BSR II contends that Aadland is not entitled to judgment that it

breached its duty of cure because it "paid maintenance, reimbursed

Aadland's out-of-pocket medical expenses, provided generous

advances, and settled with Tufts." We are not persuaded.

We do not see -- and BSR II does not explain -- how the

payment of maintenance to Aadland bears on whether it breached its

separate duty of cure. See LeBlanc, 992 F.2d at 397 (discussing

how the duty of maintenance and the duty of cure impose distinct

2 Because we agreewith Aadland that he is entitled to judgment that BSR II breached its duty of cure to him on the ground that the advances were not cure and did not suffice to satisfy BSR II's undisputed cure obligation, we need not reach his other arguments for why he is entitled to such a judgment.

- 24 - obligations). We also agree with Aadland that BSR II's

reimbursement of his out-of-pocket expenses fails to show that

there was no breach of the duty of cure, given that this

reimbursement represented, as Aadland emphasizes, less than one

percent of the amount of BSR II's undisputed cure obligation.

That leaves only BSR II's contentions about the import

of both its payment of advances to Aadland and its payment of

$400,000 to Tufts. We conclude that those contentions fail as

well.

The advances constituted cure, according to BSR II,

because (1) BSR II calculated their value in part based on the

cost of Aadland's health insurance premiums, and (2) evidence in

the record shows that, through a third party, BSR II had advised

Aadland and his wife that the advances were intended to cover their

health insurance premiums. BSR II further argues that any contrary

District Court findings were clearly erroneous.

In disagreeing with BSR II, Aadland argues that the

advances did not constitute cure because the record compels the

conclusion that the advances functioned as loans. He directs our

attention to the District Court's finding, based on signed receipts

that accompanied each advance payment, that each "advance[] [was]

characterized as an 'ADVANCE toward any settlement, judgment or

award resulting from my claim for personal injuries or illness

occurring on or about 7/20/2014, while aboard the F/V LINDA.'"

- 25 - Aadland also emphasizes that the District Court applied the

advances as a setoff not because they constituted cure but because

the District Court concluded that it "must enforce the terms of

this contract between Aadland and BSR II, which provides that any

future judgment against BSR II be reduced by the amount of the

advances paid." (Emphasis added). He then reasons that it follows

that the advances must be considered loans "to be repaid by Aadland

to BSR II when a judgment or award is issued" or when a settlement

is reached. Furthermore, Aadland reminds us that we held in

Aadland I that, if the advances were loans, then they would not be

cure, as "in that event, Aadland would have been in all relevant

respects 'abandon[ed] . . . to his fate.'" Aadland I, 42 F.4th at

46 (alteration in original) (quoting Dutra Grp., 139 S. Ct. at

2286).

We find it significant, in assessing whether the

advances were loans, that they clearly could be recovered as

setoffs against a judgment even if that judgment were not

duplicative of Aadland's entitlements under the duty of cure. Our

holding in Block Island Fishing, Inc. v. Rogers, 844 F.3d 358 (1st

Cir. 2016), shows why this feature of the record is significant.

We held in Block Island Fishing -- as BSR II itself

points out in its briefing -- that "once a shipowner pays

maintenance and cure to the injured seaman, the payments can be

recovered only by offset against the seaman's damages award -- not

- 26 - by an independent suit seeking affirmative recovery." Id. at 366

(quoting Boudreaux v. Transocean Deepwater, Inc., 721 F.3d 723,

728 (5th Cir. 2013)). Moreover, in so holding, we "adopted the

ruling of the Fifth Circuit in Boudreaux v. Transocean Deepwater,

Inc.," id. at 359, which establishes that a vessel owner may offset

"damages recovered by the seaman to the extent they duplicate

maintenance and cure previously paid," Boudreaux, 721 F.3d at 727

(emphasis added).

In other words, in Block Island Fishing, we determined

that, if a seaman recovers damages from a vessel owner that are

tied to the same expenses that have already been covered by

maintenance and cure payments made by that vessel owner, then the

vessel owner may deduct those prior payments from the judgment to

prevent double recovery. Id. In so holding, however, we also

held that a vessel owner generally may not apply cure payments as

a setoff against a non-duplicative judgment. Id.

Against that legal backdrop, the findings below compel

the conclusion that the advances at issue here operated -- for all

relevant purposes -- as loans. They were to be credited, by their

plain terms, against even a judgment that was not duplicative of

a judgment for cure itself. Accordingly, we do not see how these

advances could constitute cure. Indeed, in the prior appeal in

this case, we held that, insofar as the advances were loans, they

could not constitute cure. See Vaughan v. Atkinson, 369 U.S. 527,

- 27 - 532–33 (1962) ("Maintenance and cure differs from rights normally

classified as contractual. . . . '[N]o agreement is competent to

abrogate the incident.'" (quoting Cortes v. Balt. Insular Line,

287 U.S. 367, 371 (1932))).

Notably, BSR II does not dispute that the advances would

have to be repaid against a judgment or award for Aadland even if

that judgment in his favor were not duplicative of what he was

owed as cure. Indeed, BSR II acknowledges that the record

"inarguably establish[es] that the advances were not a loan Aadland

would be required to repay other than as a credit against any

settlement, judgment, or award resulting from his claims."

BSR II nonetheless maintains that "Aadland's argument

that paying advances amounts to abandonment is without merit."

BSR II does so in part because it argues that "advances serve as

mechanism by which a vessel owner can provide for the needs of an

injured seaman without waiving its right to contest a disputed

item of the seaman's claim." But we are not persuaded by this

response insofar as it challenges either Aadland's contention that

the advances functioned as loans or his contention that, because

they did, they cannot constitute cure.

BSR II argues that the advances constituted cure because

the use of advances is "commonplace" in the context of "seaman's

personal injury claims." BSR II explains that "[b]ecause a vessel

- 28 - owner presented with a claim for maintenance and cure has limited

time to investigate and begin paying, advances have become a common

tool for vessel owners to begin making immediate payments to

injured seam[e]n without relinquishing the right to subsequently

contest the duty."

We may assume that advances can play a role in permitting

a vessel owner to "mak[e] immediate payments" while the owner

investigates a seaman's claim. Here, however, BSR II concedes

that "after promptly investigating the claim[,] the vessel owner

must decide whether to pay or deny the claim." And yet, for the

six years after Aadland suffered his illness that manifested while

at sea, BSR II provided him with these advances, which could be

credited against a judgment that was non-duplicative of the cure

owed. At no point does BSR II explain how its claimed right to

"promptly investigat[e]" Aadland's claim for cure provides a basis

for it having provided him with only advances of this kind for

that long.3 We thus conclude that BSR II's asserted need to

3 At oral argument in the first appeal, BSR II indicated that "there was some confusion initially" about the cause of Aadland's illness and some evidence that "[Aadland] had suffered potentially a bug bite and that might be the source of the infection, a week prior to the trip, when he was in Maine." BSR II acknowledged that it "eventually determined that it was a case in which we were obligated to pay maintenance and cure . . . . It quickly became apparent that it wasn't necessarily the bug bite." BSR II also suggested that the delay in paying cure was in part because the owner was not as familiar with the cure obligation owed to a seaman who falls ill rather than suffers an injury.

- 29 - investigate Aadland's claim fails to provide any basis for

concluding that BSR II did not breach its cure obligation. See

Sullivan v. Tropical Tuna, Inc., 963 F. Supp. 42, 45 (D. Mass.

1997) (concluding that vessel owner breached the duty of cure "by

delaying one month before approving [the seaman's] surgery, and

that this breach was both unreasonable and willful"); Bickford v.

Marriner, No. 2:12-CV-00017, 2012 WL 3260323, at *4 (D. Me. Aug. 8,

2012) ("Although the shipowner has the right to investigate whether

the seaman is entitled to maintenance and cure payments, the vessel

owner must not unduly delay its decision."); see also Hines v.

J.A. LaPorte, Inc., 820 F.2d 1187, 1190 (11th Cir. 1987) (noting

"laxness in investigating a claim" for maintenance and cure as an

"example[] of willfulness meriting punitive damages and counsel

fees" (quoting Tullos v. Res. Drilling, Inc., 750 F.2d 380, 388

(5th Cir. 1985))).

BSR II separately argues that the advances must be

deemed cure to "resolve the 'unfair conundrum' raised in Bickford."

See Bickford, 2012 WL 3260323, at *5. The claimed conundrum is

that, even though a vessel owner cannot recover any overpayment in

cure, the owner faces punitive damages if the owner willfully

withholds cure.

As Aadland points out, however, Bickford described the

vessel owner's position as a "supposedly unfair conundrum," id.

(emphasis added), and the phrase "unfair conundrum" appeared in

- 30 - the opinion in that case only as a quotation from the defendant

vessel owner's briefing, id. at *2. In addition, the district

court there rejected the vessel owner's proposed alternative

mechanism for paying cure that would have allowed the owner

potentially to recover payments made during the period of its

investigation. Id. at *5.

In any event, there would be a problem for BSR II even

if we were to assume that the advances that BSR II paid Aadland

did constitute cure: the advances would not show that BSR II

satisfied its cure obligation as of September 2020 in a timely

manner. The undisputed record shows that the advances were first

made to Aadland in February 2015, backdated to December 2014. And

while it is undisputed that by the start of the trial in September

2020 BSR II had paid Aadland $238,274 in advances, it is also

undisputed that by December 2014 he already had incurred over

$300,000 in healthcare expenses related to his onboard illness.

See Farrell, 336 U.S. at 519 (observing that cure is to be paid

"in kind and concurrently with its need"); Vaughan, 369 U.S. at

531 (finding breach where seaman "was forced to hire a lawyer and

go to court to get" what was owed under the duty of maintenance

and cure).

BSR II's remaining argument as to the breach issue rests

on its $400,000 payment to Tufts to indemnify Aadland and his wife.

BSR II concedes, however, that the payment to Tufts was made on

- 31 - the "eve of trial," which means that it was made six years after

the onset of the onboard illness that triggered the duty. This

payment therefore also fails to show that BSR II did not breach

its duty -- given that the duty requires the timely payment of

cure -- between the onset of Aadland's onboard illness in 2014 and

the start of litigation. See Farrell, 336 U.S. at 519; Sullivan,

963 F. Supp. at 45-46 (concluding that vessel owner breached the

duty of cure "by delaying one month before approving [the seaman's]

surgery, and that this breach was both unreasonable and willful"

even though the vessel owner had paid all medical bills prior to

trial); see also Vaughan, 369 U.S. at 531.

Accordingly, although the District Court did not rule

directly on the issue of whether BSR II had breached its duty of

cure to Aadland as of September 2020, we conclude that he is

entitled to judgment that this breach occurred. We thus turn to

Aadland's remaining challenges on appeal, which do not take issue

with the District Court's rulings that the advances to him and the

payment to Tufts may be credited as setoffs against the cure owed

to him by BSR II. Instead, these remaining challenges take aim

only at the District Court's rulings that denied his request for

compensatory damages for his alleged emotional distress and his

request for punitive damages as well as attorney's fees.

- 32 - B.

The parties agree that a seaman may be entitled to

compensatory damages for emotional distress if the vessel owner

acts unreasonably in breaching the duty of maintenance and cure

and that breach caused the seaman emotional distress. See Morales

v. Garijak, Inc., 829 F.2d 1355, 1357 (5th Cir. 1987). In

challenging the District Court's denial of his request for damages

for emotional distress, Aadland alleges that "if BSR II had

fulfilled its duty [of cure], Tufts never should have been

involved." As a result, Aadland contends that he then would not

have experienced the "mental anguish of fighting with Tufts to

receive coverage for the care" and would not have had to "live

with the knowledge that Tufts could refuse to cover future care at

any time." Aadland therefore argues that "but for BSR II's failure

to fulfill its duty, [he] would not have been in coverage disputes

with Tufts and would not have suffered from the mental anguish

that the disputes caused him." He thus contends that the District

Court erred in ruling for BSR II with respect to his claim for

emotional distress damages.

This challenge rests, in part, on the contention that

"[t]he District Court applied an erroneous causation standard" by

applying a "direct causation standard rather than the standard

tort causation standard." Aadland argues that, under that latter

standard, he was entitled to judgment in his favor as to this

- 33 - aspect of his claim. We conclude, however, that, even accepting

Aadland's preferred causation standard, there is no merit to his

challenge. Aadland fails to show that the emotional distress he

experienced resulted from BSR II's breach.

Aadland contends that he is entitled to damages for

emotional distress because he had to "fight[] with Tufts to receive

coverage for the care" and those "coverage disputes" caused "mental

anguish." The fact that Aadland experienced emotional distress

during his interactions with Tufts does not necessarily show,

though, that BSR II's breach caused that emotional distress.

Aadland fails to make this showing.

The District Court found, and Aadland does not dispute,

that the coverage disputes concerned whether Aadland was entitled

to "admission to a skilled nursing facility (as opposed to an acute

rehabilitation facility) and the frequency of his physical and

occupational therapy." In order to show that this distress was

caused by BSR II's breach, then, he must show that the breach

caused these disputes. Aadland, however does not on appeal point

to findings or evidence in the record supportably showing that,

had BSR II timely satisfied its duty of cure, it would have paid

for the higher level of care that he sought from Tufts.4 See

4 At oral argument, Aadland acknowledged that he had the burden to demonstrate that BSR II acted unreasonably and that the unreasonable conduct caused his emotional distress. He argued,

- 34 - LeBlanc, 992 F.2d at 397 (recognizing that under the duty of cure

a seaman is entitled to "necessary" healthcare expenses).

Accordingly, Aadland fails to show that the coverage disputes that

caused his emotional distress were caused by BSR II's breach

because he does not point to findings or evidence supportably

showing that BSR II would have acted differently than Tufts with

respect to paying for the care in question in such a way that would

have reduced the likelihood of those disputes. In other words,

Aadland has not provided any evidence that the disputes resulted

from BSR II's breach rather than from the nature of the care

requests that he was making.

We also are not persuaded insofar as Aadland is arguing

that he is entitled to damages for emotional distress because he

had to "live with the knowledge that Tufts could refuse to cover

future care at any time." He does not point to any factual finding

or evidence in the record that establishes that he experienced

such fear. In fact, he does not identify any factual finding or

evidence that indicates that he was even aware of the fact that

Tufts might not cover care resulting from his onboard illness.

however, that as a matter of equity, we should require BSR II to prove that Aadland would have faced the same emotional distress if BSR II -- rather than Tufts -- had paid for the care. This argument was not developed in his brief on appeal or before the District Court and is therefore waived. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) ("[I]ssues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived.").

- 35 - Aadland fails to do so, moreover, even though the District Court

found that:

Nothing in the trial record shows that Tufts threatened to stop covering Aadland's medical bills because a work-related injury was outside his insurance policy. Nor did the evidence at trial show when, prior to Tufts' receipt of the $400,000 payment, Aadland became aware that Tufts['] policy on work-related injuries might be invoked to exclude his treatment from coverage.

(Citation omitted). Indeed, Aadland does not directly argue that

any of these factual findings were erroneous. Nor does he point

us to any evidence in the record that contradicts them.

Moreover, as noted above, the District Court found that

Aadland received all necessary medical care and Aadland does not

directly dispute that finding. Nor do we see any reason to

conclude that this finding was clearly erroneous, insofar as

Aadland does mean to take issue with it on appeal. Aadland also

does not point to any evidence supportably showing that the care

covered by Tufts was at risk of falling below the level of care

that he was entitled to receive under the duty of cure. And

Aadland also neither points to any finding that indicates that

BSR II would have paid for a higher level of care than his insurer

did nor argues that the District Court clearly erred in failing to

make such a finding. He also does not point to any evidence that

Tufts acted in such a way that if BSR II acted in that same manner,

it would have violated its duty of cure to him.

- 36 - In sum, then, Aadland has failed to show -- regardless

of the standard of causation -- how BSR II would have acted

differently than Tufts during the relevant period. Thus, we have

no evidentiary basis from which to conclude that Aadland would

have been spared any emotional distress that he suffered if BSR II,

rather than Tufts, had paid for his care and satisfied its duty of

cure in the first instance.

We must reject, too, the argument that "the lower court

also erred in finding that Aadland had to present evidence beyond

his and his wife's testimony to prove causation." The District

Court clearly noted that "expert testimony is not required to prove

emotional damages" and nothing in the record suggests that the

District Court nevertheless imposed such a requirement on Aadland.

There remains Aadland's challenge in his appeal to the

District Court's denial of his request for punitive damages as

well as attorney's fees. In Atlantic Sounding Co. v. Townsend,

557 U.S. at 424, the Supreme Court held that "[b]ecause punitive

damages have long been an accepted remedy under general maritime

law, . . . such damages for the willful and wanton disregard of

the maintenance and cure obligation should remain available in the

appropriate case as a matter of general maritime law." See also

Dutra Grp., 588 U.S. at 375 (recognizing that "a claim of

maintenance and cure . . . addresses a situation where the vessel

- 37 - owner and master have 'just about every economic incentive to dump

an injured seaman in a port and abandon him to his fate'" (quoting

McBride v. Estis Well Service, LLC, 768 F.3d 382, 394 n.12 (5th

Cir. 2014) (Clement, J., concurring))). And, for more than half

a century, this Circuit has held that a district court has

discretion to award punitive damages for the callous, willful,

recalcitrant, or wanton failure to pay maintenance and cure. See

Robinson v. Pocahontas, Inc., 477 F.2d 1048, 1051-52 (1st Cir.

1973); see also Pino v. Prot. Mar. Ins. Co., 490 F. Supp. 277, 281

(D. Mass. 1980) ("It is settled in this Circuit that an admiralty

court has discretion to award a seaman punitive damages when a

shipowner's refusal to pay maintenance and cure was the result of

a 'wanton and intentional' disregard of the seaman's legal rights."

(quoting Robinson, 477 F.2d at 1051)).

Here, the parties do not dispute that a vessel owner is

subject to punitive damages or obliged to pay the seaman's

attorney's fees when the owner is callous, willful, recalcitrant,

or wanton in failing to satisfy its obligations under the duty of

cure. See Robinson, 477 F.2d at 1051. The parties also seem to

agree that a vessel owner may defeat a claim for punitive damages

as well as attorney's fees when it can show that it relied on a

"reasonable defense" in not satisfying its claimed duty of cure.

See Morales, 829 F.2d at 1358. The parties disagree, however,

about whether, given those standards, BSR II's conduct permits the

- 38 - imposition of those remedies. And the parties do so even though

they appear to share the view that the District Court held that

those remedies were not legally permitted here because BSR II's

conduct in committing any breach of its duty of cure was not

callous, willful, recalcitrant, or wanton.

We treat a district court's finding as to whether a

vessel owner was callous, willful, recalcitrant, or wanton in

failing to pay maintenance or cure as a factual finding that is

reviewed only for clear error. See Trupiano v. Captain Gus &

Bros., No. 94-1690, 1994 WL 702324, at *1 (1st Cir. Dec. 15, 1994);

Breese v. AWI, Inc., 823 F.2d 100, 102-03 (5th Cir. 1987). As we

will explain, we agree with Aadland that, contrary to the District

Court's finding, it is clear from this record that BSR II's conduct

in not fulfilling its duty of cure as of September 2020 was

callous, willful, recalcitrant, or wanton. We reach this

conclusion in part because, as we will explain, we agree with

Aadland that it is clear that BSR II lacked a reasonable defense

in failing to fulfill its cure obligation. We thus conclude that

punitive damages and the award of attorney's fees may very well be

appropriately granted as an exercise of discretion by the District

Court. Accordingly, we vacate the District Court's denial of

Aadland's request for punitive damages as well as attorney's fees

and remand for further proceedings.

- 39 - 1.

We begin by addressing BSR II's arguments that we must

affirm the denial of Aadland's request for punitive damages and

attorney's fees on grounds independent of those on which the

District Court relied. BSR II argues that, even setting aside the

District Court's reasons for finding that it was not callous,

willful, recalcitrant, or wanton in failing to fulfill its duty of

cure as of September 2020 (insofar as it so failed), punitive

damages and attorney's fees still are not permitted on this record.

That is so, according to BSR II, because (i) the dispute between

Aadland and itself over cure focused only on the adequacy of the

cure that BSR II provided; (ii) delay in paying cure cannot, alone,

justify punitive damages for breaching the duty of cure; and

(iii) Aadland was not harmed by any breach of the duty of cure.

We are not persuaded.

To support the contention that "where, as here, the

dispute was solely whether [it] provided adequate maintenance and

cure, punitive damages would never have been appropriate," BSR II

cites two cases: Harper v. Zapata Off-Shore Co., 741 F.2d 87 (5th

Cir. 1984), and Richoux v. Jefferson Marine Towing, Inc., No. 13-

375, 2014 WL 47335 (E.D. La. Jan. 6, 2014). We do not see how

Harper, a Fifth Circuit case from 1984, assists BSR II's cause.

- 40 - The Fifth Circuit acknowledged in that case that, for

the purposes of awarding punitive damages, "grossly inadequate"

payments were distinguishable from a shipowner's "good faith"

payments that later turned out to be inadequate. Harper, 741 F.2d

at 90. As we explain more fully below, the willfulness of BSR II's

unreasonable delay in paying cure and the clear evidence of its

breach makes this case more like the former, rather than the

latter, situation. Furthermore, Harper appears to be but one link

in the Fifth Circuit's chain of cases limiting the awards of

punitive damages. In fact, the Fifth Circuit subsequently barred

punitive damages altogether in maintenance and cure cases. Yet

the Supreme Court has now held that punitive damages are available

in such cases. See Guevara v. Mar. Overseas Corp., 59 F.3d 1496,

1513 (5th Cir. 1995) (barring punitive damages), abrogated by Atl.

Sounding Co., 557 U.S. at 404.

The second case cited by BSR II on this point is an

unpublished, out-of-circuit decision that followed the relevant

holding from Harper as binding precedent. Richoux, 2014 WL 47335,

at *5 (citing Harper, 741 F.2d at 88). That decision thus fails

to help BSR II for the same reasons that Harper fails to do so.

In addition, given the purposes of punitive damages, we

see no reason to deem the award of such damages categorically

impermissible in cases that involve a failure by the vessel owner

to pay some but not all cure owed. See Vaughan, 369 U.S. at 533

- 41 - ("It would be a sorry day for seamen if shipowners, knowing of the

claim for maintenance and cure, could disregard it . . . and then

evade part or all of their legal obligation by having it

reduced . . . . This would be a dreadful weapon in the hands of

unconscionable employers . . . ."); BMW of North America, Inc. v.

Gore, 517 U.S. 559, 568 ("Punitive damages may properly be imposed

to further a State's legitimate interests in punishing unlawful

conduct and deterring its repetition."). In fact, other cases

have imposed punitive damages and attorney's fees where the vessel

owner did pay some cure and thus where the question presented

concerned only the adequacy of that cure. E.g., Hicks v. Tug

PATRIOT, 783 F.3d 939, 940-41 (2d Cir. 2015); Hines, 820 F.2d at

1190.

We next address BSR II's argument that "delay alone is

not grounds for punitive damages as a vessel owner presented with

a claim for maintenance and cure is entitled to investigate and

require corroboration before paying maintenance and cure." For

this proposition, BSR II relies on Sullivan v. Tropical Tuna, Inc.

That case did note that "the shipowner need not

immediately commence payments; he is entitled to investigate and

require corroboration of the claim." Sullivan, 963 F. Supp. at 45

(quoting Morales, 829 F.2d at 1358). But Sullivan did not suggest

that a delay in paying cure could never support a request for

- 42 - punitive damages. In fact, it did not address punitive damages

for a breach of the duty of cure at all. See id. at 45-47

(discussing seaman's entitlement to compensatory damages and

attorneys' fees but not discussing punitive damages).

In addition, as discussed above, BSR II has not shown

how the need to investigate and corroborate Aadland's entitlement

to cure could justify its six-year delay in paying cure (given

that, as we have explained, the advances were not cure), from the

onset of the illness to the Tufts settlement payment. BSR II's

failure in that regard is even more conspicuous once we account

for Sullivan having found that the shipowner in that case "breached

[the duty of maintenance and cure] by delaying one month before

approving [the seaman's] surgery, and that this breach was both

unreasonable and willful." Id. at 45.

In sum, BSR II's categorical contention that delay is

"not grounds for punitive damages" reflects neither our precedent

nor even the case that BSR II cites for the proposition. It thus

provides no support for BSR II's position.

BSR II's remaining independent ground for affirming the

judgment as to punitive damages is that "[p]unitive damages only

become appropriate where the injured seaman has incurred some loss

or endured unduly prolonged suffering." Once again, BSR II

purports to derive this rule of law from Sullivan. As we have

- 43 - explained, however, that decision lacked any discussion of the

appropriate circumstances in which to award punitive damages.

In any event, BSR II mischaracterizes the purpose of

punitive damages in pressing this line of argument. See State

Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416 (2003)

("[I]n our judicial system compensatory and punitive damages,

although usually awarded at the same time by the same

decisionmaker, serve different purposes. . . . [P]unitive

damages . . . are aimed at deterrence and retribution."). Nor do

we see a reason to add a requirement that the withholding of cure

must have caused incremental injury, given the Supreme Court's

clear holding in Atlantic Sounding that punitive damages are

available for willful withholding of cure. See Atl. Sounding, 557

U.S. at 424. We thus reject BSR II's argument that punitive

damages are not "appropriate," as a categorical matter, unless the

seaman has "incurred some loss or endured unduly prolonged

suffering."

2.

We turn, then, to the District Court's reasons for

denying Aadland's request for punitive damages and attorney's

fees. The District Court explained that:

BSR II paid regular advances to Aadland to cover his mortgage payments, insurance payments, and living expenses, it paid his out-of-pocket medical expenses, there were not any medical expenses presented to BSR II that

- 44 - it declined to pay, and ultimately, it paid Tufts in satisfaction of any lien or claim Tufts might bring against Aadland. Patania was in close contact with Aadland throughout his treatment. Also, on the record here, Aadland timely received all care deemed medically necessary. . . . Indeed, as the First Circuit's opinion and [the District Court]'s analysis reveal[], it was not clear given the unusual facts of this case whether BSR II was liable for Aadland's medical treatment where it was covered by private insurance paid for with deductions from his wife's paycheck or made from their joint account including when Aadland was receiving advances from BSR II.

The District Court then ruled that, "having considered the entirety

of the record, . . . even if BSR II had failed to cure in a timely

manner, Aadland has not shown that BSR II was callous, willful, or

recalcitrant in such failure."

As noted above, we do not understand the District Court

merely to have made a discretionary determination that no punitive

damages or attorney's fees should be awarded for BSR II's callous,

willful, recalcitrant, or wanton failure to satisfy its duty of

cure as of September 2020. We instead read the District Court to

have ruled that, as a matter of law, no punitive damages or

attorney's fees could be awarded on this record because of its

finding that BSR II had not engaged in a callous, willful,

recalcitrant, or wanton failure to satisfy its duty of cure as of

September 2020 (insofar as such a failure occurred). However, for

the reasons we will explain, we cannot agree with the District

- 45 - Court's finding in this regard. Rather, we conclude that it is

clear on this record that BSR II did breach the duty of cure and

that the breach was callous, willful, recalcitrant, or wanton.

Thus, we are compelled to conclude that the District Court's

contrary finding does not survive clear error review. See

Trupiano, 1994 WL 702324, at *1; Breese, 823 F.2d at 102-03.

To set the stage, we emphasize that Aadland bears the

burden of establishing that BSR II was callous, willful,

recalcitrant, or wanton in breaching its duty of cure. See Atl.

Sounding Co., 557 U.S. at 407; Robinson, 477 F.2d at 1051. That

a breach occurred is clear, for the reasons we have explained.

Accordingly, the critical issue with respect to the request for

punitive damages as well as attorney's fees concerns whether after

reviewing the record we are "left with the definite and firm

conviction that" Aadland has also met his burden to establish that

BSR II willfully committed that breach, notwithstanding the

District Court's contrary finding. Jose Santiago, Inc. v.

Smithfield Packaged Meats Corp., 66 F.4th 329, 340 (1st Cir. 2023)

(quoting García Pèrez v. Santaella, 364 F.3d 348, 350 (1st Cir.

2004)).

For all the reasons that we have explained, Aadland has

shown what he must to establish that, unless there is some basis

for supportably finding that BSR II reasonably understood that it

had somehow satisfied that duty even though it had not, BSR II was

- 46 - willful in breaching its duty of cure and that it was clear error

to conclude otherwise. But we see no basis in the record for

concluding that BSR II has made such a showing, even accounting

for the District Court's findings.

In explaining its punitive damages ruling, the District

Court pointed to its finding that "Aadland timely received all

care deemed medically necessary." But the mere fact that Aadland

paid for and received sufficient medical care fails to suffice to

show that BSR II was not callous, willful, recalcitrant, or wanton

in breaching its duty of cure, precisely because it is clear on

this record that BSR II did not itself pay either for the care or

for Aadland's insurance. Thus, this finding -- supported though

it is -- provides no basis for finding that BSR II was not callous,

willful, recalcitrant or wanton in committing the breach of its

duty of cure that we conclude the record clearly shows that it

committed.

Second, we fail to see why the fact that "Patania was in

close contact with Aadland throughout his treatment" shows that

BSR II was not callous, willful, recalcitrant, or wanton in not

fulfilling it duty of cure.5 As we have explained, there was a

breach of the duty of cure, and nothing about the fact that Patania

was in "close contact" suggests that BSR II was unaware of its

5 As a reminder, Patania is one of the owners of BSR II.

- 47 - duty to provide cure or that it had a reasonable basis for

concluding that it had satisfied that duty. If anything, that

fact indicates that BSR II was aware of Aadland's need for medical

care due to his onboard illness and yet still breached.

Third, the fact that BSR II paid Aadland's out-of-pocket

medical expenses fails to provide any basis for concluding that

BSR II's clear breach was not callous, willful, recalcitrant, or

wanton. As Aadland points out, those expenses constituted less

than one percent of the cure obligation. See Hicks, 783 F.3d at

941, 945 (awarding punitive damages and attorney's fees in case

where vessel owner had paid some maintenance and cure); Hines, 820

F.2d at 1189-1190 (same); Sullivan, 963 F. Supp. at 45 (finding

vessel owner's "breach was both unreasonable and willful" even

though the vessel owner "ha[d] now paid all of [the seaman's]

medical bills"). Indeed, the payment of these expenses provides

at least some evidence that BSR II understood that it owed cure.

The District Court did also base its denial of punitive

damages and attorney's fees on its finding that:

[A]s the First Circuit's opinion and [the District Court]'s analysis reveal[], it was not clear given the unusual facts of this case whether BSR II was liable for Aadland's medical treatment where it was covered by private insurance paid for with deductions from his wife's paycheck or made from their

- 48 - joint account including when Aadland was receiving advances from BSR II.6

We thus need to consider this ground for the District Court's

finding that BSR II was not callous, willful, recalcitrant, or

wanton in breaching its duty of cure.

We set aside for the moment the potential import to this

issue of the fact that BSR II was paying advances to Aadland. That

way we first can focus on the potential import of the fact that

Aadland was paying the costs of his care through insurance that

was paid for both from an account that he held jointly with his

wife and through deductions from her paychecks. We do not see how

this fact, however, provides a basis for finding that the breach

of the duty of cure was not callous, willful, recalcitrant, or

wanton.

6 We understand the District Court to have found that "the unusual facts" that Aadland's wife contributed to his insurance and that BSR II paid advances to Aadland made BSR II's liability unclear. To the extent that the District Court can be read to have concluded that either our prior opinion, by remanding for a determination as to how Gauthier applied to the advances, or the complex procedural history of this case demonstrates ambiguity over whether BSR II had a duty of cure that it had failed to satisfy, we disagree. In our prior ruling, we vacated the District Court's prior denial of punitive damages and remanded for further proceedings. Aadland I, 42 F.4th at 52. But we did not address whether BSR II had reason to doubt that it had failed to satisfy its duty of cure insofar as the advances were loans and Gauthier applied. We thus in no way suggested that BSR II had reason to understand that it had fulfilled its duty of cure if (1) it accepted that Gauthier was applicable insofar as it was not distinguishable on its facts and (2) the record clearly established that the advances functioned as loans.

- 49 - As we have explained, the parties agree that BSR II is

not obliged to pay punitive damages for that breach if, at the

time, it had a reasonable defense against satisfying the now-

undisputed cure obligation. But, in ruling on the punitive damages

issue on remand, the District Court did not suggest that BSR II

had a reasonable basis to have understood Gauthier to be

inapplicable apart from the possible basis arising from the

"unusual facts" that the private insurance in this case was paid

for through funds tied to Aadland's wife while BSR II was paying

advances.7 And, we fail to see what reasonable basis BSR II would

have had for concluding that Gauthier would not apply in this

specific case simply because Aadland's insurance was being paid

with funds that came from his wife.

7We note that the District Court's finding that BSR II did not act willfully insofar as it breached its duty of cure was not premised on a finding that it was reasonably unclear that Gauthier had any application to Aadland's circumstances because this Circuit as of September 2020 had not adopted the reasoning of that case. Further, at no point in the litigation has BSR II developed an argument that it reasonably did not know if a court in the First Circuit would adopt the logic of Gauthier in circumstances analogous to those of the Fifth Circuit case. Indeed, BSR II favorably cited Gauthier in the first appeal. Insofar as BSR II has argued that it reasonably did not know that Gauthier would apply to this case, it did so only on the basis that Gauthier was factually distinguishable because of the involvement of Aadland's wife and given the advances it paid to Aadland. Aadland I, 42 F.4th at 51. Accordingly, we do not address whether BSR II's conduct could have been reasonable -- and therefore not willful -- given the potential uncertainty over whether a court in this Circuit would adopt the logic of Gauthier in circumstances analogous to those of that case.

- 50 - In that regard, and as we noted above, we held in the

prior appeal in this case that there was no merit in BSR II's

attempt to distinguish the present circumstances from those

present in Gauthier based on the involvement of Aadland's wife in

securing the health insurance from Tufts. Aadland I, 42 F.4th at

46-48. Moreover, insofar as the fact that Aadland relied on his

wife's resources might have been thought to raise any question

about Gauthier's applicability, we do not see how it raised a

question that reasonably supported a conclusion that Aadland did

not pay for his care "alone" within the meaning of Gauthier. It

has been clear for nearly three quarters of a century that "the

shipowner's liability for maintenance and cure [is] among 'the

most pervasive' of all and that it [is] not to be defeated by

restrictive distinctions nor 'narrowly confined.'" Vaughan, 369

U.S. at 532 (quoting Aguilar v. Standard Oil Co., 318 U.S. 724,

730 (1943)). As a result, it has also been the law for that long

that "[w]hen there are ambiguities or doubts, they are resolved in

favor of the seaman." Id. (emphasis added).

We note, too, that there was no finding below that either

Aadland or BSR II subjectively understood at any time prior to

September 2020 that Aadland's wife's involvement would affect

BSR II's obligation to pay cure. Nor does BSR II identify any

evidence to support such a finding. Thus, the assertedly "unusual

fact[]" that Aadland drew on his wife's resources to cover his

- 51 - health insurance provides no basis for concluding that BSR II had

a reasonable belief that it either had no duty of cure or that it

had satisfied that duty.

That leaves, then, only the question of whether the

"unusual fact[]" that BSR II was paying advances to Aadland in and

of itself provides a basis for finding that BSR II's failure to

satisfy its full obligation under the duty of cure was not callous,

willful, recalcitrant, or wanton. We understand the District Court

to have concluded that, because of the advances, "it was not clear"

whether Aadland "alone" paid for his health insurance. We thus

understand the District Court to have concluded on that basis that

it also was not clear whether, under Gauthier, "BSR II was liable

for Aadland's medical treatment." But we cannot agree.

Gauthier holds that when a seaman alone pays for health

insurance, the seaman incurs, for the purposes of cure, the full

cost of his care even if the insurer directly bears the cost of

the care. Gauthier, 752 F.2d at 1090. And, in our prior decision

in this case, we held that, under Gauthier, Aadland would have

paid "alone" if the advances functioned as loans. Aadland I, 42

F.4th at 46. Thus, if it were clear that the advances functioned

as loans, then the advances could not have provided a reasonable

basis for BSR II to conclude that, insofar as Gauthier did apply,

the reasoning there would not apply here. And, as discussed above,

we see no basis for concluding on this record that these advances

- 52 - functioned as anything other than loans. See Block Island Fishing,

844 F.3d at 366 (citing Boudreaux, 721 F.3d at 728).8

In any event, even if it were reasonably unclear that

Gauthier applied here due to the advances, BSR II would still have

been responsible for at least some portion of Aadland's premium

payments. Yet, this record makes clear that BSR II would not have

timely satisfied that obligation.

As BSR II concedes, it has been clear since around

November 2014 that Aadland is entitled to cure to cover reasonably

necessary medical treatment resulting from his July 2014 onboard

illness. And the obligation to pay the premiums would have been

part of that obligation, even if Gauthier were inapplicable. At

least until 2020, however, BSR II did not pay cure -- given that

the advances clearly were loans -- to Aadland, apart from its

reimbursement of Aadland's out-of-pocket expenses that

collectively represent less than one percent of BSR II's cure

obligation. The advances, then, do not alter our understanding

that BSR II clearly was willful in failing to pay timely cure for

a period of at least five years.

8 We do note that the District Court supportably found that BSR II did not communicate to Aadland that the advances were to be used to pay for his premiums and that we see no error in the District Court's finding that BSR II did not, in paying the advances, dedicate the payments to Aadland's healthcare expenses. Moreover, we also note that BSR II makes no argument that a seaman's mere receipt of funds from the vessel owner shows that the seaman did not alone pay for his insurance.

- 53 - As a final note, the District Court concluded that BSR II

was not callous, willful, or recalcitrant after "[h]aving

considered the entirety of the record." The District Court did

not state that there were any other features of the

record -- beyond those that we have not already addressed -- that

would support such a conclusion. But, if it did have some such

features in mind, we emphasize that our own review of the entirety

of the record, if anything, only tends to reinforce our reasons

for concluding that the record clearly shows that BSR II was

willful in not fulfilling its duty of cure as of September 2020.

In that regard, we note that the record supportably shows

the following: on November 10, 2014 -- almost four months after

Aadland's injury and three months before the first advance payment

was made -- BSR II's insurance broker informed Patania of concerns

from BSR II's insurance claims adjuster regarding BSR II's failure

to provide maintenance and cure. The concerns were "that by

failing to act at this time [BSR II and Patania] may be exposing

[themselves] to [punitive] damages" and to avoid this issue they

should "promptly advise Mr. Aadlund [sic] of his probable right to

maintenance and cure." Yet, at the end of November 2014, BSR II's

marine casualty investigator informed Aadland that it was a "big

if" whether BSR II would be able to provide any financial support

and that nothing could be done until he left the hospital. When

Cynthia Aadland reported to Patania that Aadland's benefits would

- 54 - not be clear until Aadland left the hospital, Patania responded

"Ok." BSR II offers no explanation to us as to why Aadland would

have to leave the hospital for BSR II to begin cure payments or to

assess his entitlement to maintenance and cure.

Further documentation between BSR II's insurance claims

adjuster and casualty investigator also suggests that BSR II was

aware by January 22, 2015 that Tufts was paying for Aadland's

medical care and that the total bills "[were] in the amount of

$600,000," but "[d]ue to the fact that this illness was not

initially presented and that medical bills are being paid for by

a health insurance carrier, [BSR II's casualty investigator] [has]

refrained from requesting medical records from healthcare

providers." BSR II's casualty investigator continued to monitor

Aadland's condition and provide status updates to BSR II's

insurance company, in which, in September 2015, he described that

BSR II would "not be requesting medical reports due to that fact

that care is being provided through a third party." By March 2016,

BSR II indicated its belief that Aadland's healthcare benefits had

run out and that he was seeking healthcare through other means,

yet there is no indication that BSR II at that time attempted to

provide cure to ensure that Aadland received necessary care. And,

just a few months later, BSR II's casualty investigator also

acknowledged that "Tuft's [sic] Medical has not filed any liens

and to the best of my knowledge have not been notified that this

- 55 - could possibly be a work-related illness and therefore unless

something else develops in the near future I do not see that as a

potential exposure for the cure issue at this time." (Emphasis

added).

We need not dig any deeper. At a minimum, these features

of the record suggest that BSR II was aware by November 2014 of

its potential exposure to punitive damages in delaying paying cure,

that it continued to wait to provide payments until February 2015,

that it chose to avoid requesting medical records and addressing

the "cure issue" as Aadland was covered by third-party insurance,

and that it did not offer to pay the premiums for that insurance.

These features of the record fail to provide support for a finding

that BSR II had a reasonable basis for understanding either that

it had no duty of cure or that it had timely satisfied that duty

as of September 2020.

In sum, the evidence clearly shows that Aadland was owed

a duty of cure following the onset of his illness; that (under

Gauthier) he nonetheless "alone" paid for the costs of the bulk of

his related healthcare; that BSR II did not meet its cure

obligation; and that, in any event, even what BSR II contends

constituted cure was not paid in full in a timely manner.

Moreover, we conclude that none of the District Court's reasons

for finding that BSR II did not act willfully in acting in this

manner hold up, and we see no other basis in the record for finding

- 56 - that BSR II's conduct in breaching its duty of cure was anything

other than willful.

Thus, given the fact that BSR II's independent arguments

for affirmance are not persuasive, the clear evidence of breach,

the length of the delay in paying cure, and the lack of a reasonable

defense as to the nonpayment of cure, we conclude that, on this

record, it is clear that Aadland has met his burden to show that

BSR II's breach of its cure duty was callous, willful,

recalcitrant, or wanton. See Atl. Sounding Co., 557 U.S. at 407;

Robinson, 477 F.2d at 1051. As a result, we vacate the District

Court's denial of Aadland's request for punitive damages and

attorney's fees.

That said, a finding of callous, willful, recalcitrant,

or wanton breach is only a precondition to an award of punitive

damages and attorney's fees. See Atl. Sounding Co., 557 U.S. at

409. The determination of the proper award for such a breach is

one that must be made as an exercise of sound discretion, based on

what the record shows regarding that breach. We leave to the

District Court on remand the assessment of whether, in its

discretion, punitive damages and attorney's fees should be awarded

and, in the event that punitive damages are awarded, what amount

of punitive damages would be appropriate.

- 57 - D.

Having determined that we must vacate the District

Court's ruling as to punitive damages as well as attorney's fees,

we still must address Aadland's contention, separate from the

merits, that, upon remand, we should assign the case to a different

District Court judge. We see little reason to require a new judge

to become familiar with this extensive record. This is a

complicated case that has been handled well and with care. Thus,

we see no reason to exercise our discretion in the manner that

Aadland requests.

IV.

We now turn our attention to the arguments that BSR II

presents in its cross-appeal: first, that the District Court's

finding that Aadland had not reached MMR was clearly erroneous;

and second, that BSR II should receive a $605,338.07 setoff for

the $400,000 payment it made to Tufts because that $400,000 payment

extinguished a potential lien against Aadland of $605,338.07 and

so the value to Aadland was, according to BSR II, actually

$605,338.07.

In challenging the District Court's finding that Aadland

had not reached MMR as of September 2020, BSR II maintains that it

was clear error to reach that conclusion given the evidence in the

record. We cannot agree.

- 58 - BSR II does not dispute that it has the burden to show

that Aadland had reached MMR as of September 2020. On appeal,

BSR II points to two pieces of evidence that it contends show that

the District Court erred and that Aadland's health issues are no

longer improving. First, BSR II points to a note from Dr. Wener,

one of Aadland's treating physicians. In December 2015, Dr. Wener

commented, with regard to Aadland's health: "He is doing amazingly

well at this point. He will stay on lifelong prophylactic

penicillin . . . . He will continue lymphedema management . . . .

I will see Mr. Aadland back in . . . 4 months, if not needed

sooner." Second, BSR II notes that "Aadland's cardiologist, Dr.

Mascari, had placed him on Coumadin for life." On appeal, BSR II

does not highlight any other evidence in the record that it

contends shows Aadland has reached MMR.

Aadland, in response, argues that we should "decline to

take up BSR II's argument" on this point because we previously

ruled, in our 2022 decision, that BSR II failed to meet its burden

to prove MMR at trial and that ruling is final. In the alternative,

Aadland argues that even if we do reach the issue, we should affirm

the District Court's finding that BSR II failed to meet its burden

because "[n]one of the medical records support a finding that a

medical determination has been made by those treating Aadland that

he has unequivocally met a medical end."

- 59 - We proceed to the merits. The District Court ruled on

this issue, BSR II timely appealed that ruling, and our ruling in

the prior case did not foreclose continued consideration of this

issue in the current litigation. We nonetheless affirm the

District Court's finding that BSR II failed to meet its burden to

show that Aadland is no longer improving.

The two pieces of evidence BSR II points to on

appeal -- a comment from a treating physician and a lifetime

prescription from that physician and another doctor -- do not show

that the District Court clearly erred in finding that BSR II had

failed to show by a preponderance of the evidence that further

treatment is merely palliative rather than curative. See 1 Robert

Force & Martin J. Norris, The Law of Seamen § 26:37 (5th ed. 2024)

("The mere fact that a seaman suffered a permanent injury does not

foreclose the possibility of improvement."). Thus, we conclude

that the District Court did not clearly err in ruling that Aadland

had not reached MMR as of September 2020.

We do acknowledge, however, that the District Court's

judgment in this respect was limited only to holding that BSR II

had an ongoing duty to provide cure after that time. On remand,

the District Court should determine the amount of maintenance still

owed. See Whitman, 387 F.3d at 71-72 (explaining that an injured

seaman is entitled to maintenance and cure until MMR is reached).

- 60 - BSR II does contend that "[e]ven if BSR II has not shown

by a preponderance of evidence that Aadland is no longer receiving

curative treatment, it does not necessarily follow that Aadland is

correct that BSR II should be ordered to resume payment of

maintenance and cure." BSR II contends that this is so because

"Aadland has failed to provide any documentation" after BSR II

"requested Aadland's current maintenance expenses as well as his

current treatment records and corresponding expenses."

This dispute about post-trial interactions between the

parties was not developed below, however, and we decline to address

it. On remand, though, the District Court may consider any

relevant arguments about BSR II's duty to pay maintenance and

cure -- including arguments that Aadland has reached MMR since

September 2020 or has failed to comply with his requirements

resulting from his receipt of maintenance and cure.

Finally, BSR II contends that "[t]he District Court

erred in only crediting the dollar amount of BSR II's settlement

with Tufts against BSR II's cure obligation." BSR II argues that

because its $400,000 payment to Tufts extinguished Tufts'

potential claim against Aadland, BSR II should receive "the full

value of that settlement to Aadland," or $605,338.07, as an offset

for its payment. BSR II maintains that "[w]hether BSR II repaid

Tufts in full or negotiated the settlement it did, the net result

- 61 - was the same; the Aadlands were relieved of any liability to

Tufts." Based on this premise, BSR II maintains that "[i]n failing

to credit BSR II the full value of the bargained for settlement,

the District Court has awarded Aadland a double recovery." We are

not persuaded.

The District Court credited the $400,000 payment to

Tufts as a setoff because Aadland had "acknowledge[d] this amount

'should be credited towards [BSR II's] cure obligation.'"

(Emphasis added). Thus, the only reason offered by the District

Court for applying BSR II's payment to Tufts as a setoff against

the judgment is Aadland's concession on that point. But that

concession only supports offsetting the judgment by $400,000.

The District Court found Aadland "acknowledge[d] this

amount" -- and thus not some greater amount -- "should be credited

towards [BSR II's] cure obligation." Given the District Court's

reasoning below cannot provide a basis for concluding a greater

amount should apply as a setoff, BSR II's argument that it is

entitled to a setoff of greater value can succeed only if there is

some other ground for concluding that the payment to Tufts should

apply as a setoff at all. But we do not understand BSR II to have

developed an argument that we should find another basis for

applying the payment as a setoff.

We note also that the District Court did not find -- and

the record does not conclusively show -- that Tufts did have a

- 62 - lien in the amount of $605,338.07. And BSR II does not argue on

appeal that the District Court clearly erred by not finding that

Tufts had a lien of $605,338.07 against Aadland for his care. In

the absence of such a finding, the record does not make clear

whether Tufts could have attempted to exercise its potential lien,

or whether Aadland may have successfully demonstrated that his

treatment was covered by the Tufts policy and so no lien could be

filed against him.

Thus, given the absence of any findings as to whether

Tufts in fact had a lien against Aadland or findings as to the

value of such a lien, we have no basis on which to conclude that

BSR II is entitled to $605,338.07 as a setoff for its payment to

Tufts. And that is so even assuming that there was another basis

on which to find that the settlement to Tufts should result in

some amount to be offset against the judgment. Accordingly, we

decline to adjust the setoff that the District Court provided to

BSR II for its payment to Tufts.

For the foregoing reasons, we affirm the judgment for

BSR II on Aadland's claim for compensatory damages for emotional

distress. We vacate the District Court's judgment on Aadland's

claims for punitive damages and attorney's fees and remand so that

the District Court may determine in its discretion whether and in

what amount those damages should be awarded. We affirm the

- 63 - District Court's conclusion that Aadland had not reached MMR as of

September 2020 and affirm the conclusion that BSR II should receive

a $400,000 setoff for the payment to Tufts. We also decline to

order that a new district court judge take the case upon remand.

The parties shall bear their own costs.

- 64 -