Beverly Hale v. Bae Sys. San Fran. Ship Repair

• Court: Court of Appeals for the Ninth Circuit
• Decided: April 17, 2020
• Docket: 18-72869
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS APR 17 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

BEVERLY HALE, No. 18-72869

Petitioner, BRB No. 17-0523

v. MEMORANDUM* BAE SYSTEMS SAN FRANCISCO SHIP REPAIR, INC.; et al.,

Respondents.

LUZ VERDUCCI, No. 18-73063

Petitioner, BRB No. 17-0551

v.

BAE SYSTEMS SAN FRANCISCO SHIP REPAIR, INC.; et al.,

On Petition for Review of an Order of the Benefits Review Board

Argued and Submitted February 11, 2020 San Francisco, California

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Before: R. Guy Cole, Jr.,** Ronald M. Gould, and Mary H. Murguia, Circuit Judges.

The Longshore and Harbor Workers Compensation Act (the Longshore Act)

is a federal law enacted to protect longshore and harbor workers who suffer injuries

related to their employment. See Estate of Cowart v. Nicklos Drilling Co., 505 U.S.

469, 470–71 (1992); see also Matulic v. Dir., OWCP, 154 F.3d 1052, 1057 (9th Cir.

1998) (discussing the “humanitarian purposes” of the statute). It does so in part by

requiring employers to pay death benefits to dependents of workers who die as a

result of a work injury. 33 U.S.C. §§ 904, 909. In the two cases before this court,

Petitioners Beverly Hale and Luz Verducci—both widows of California shipyard

workers who were allegedly exposed to asbestos on the job and suffered fatal illness

as a result—seek compensation under the Longshore Act. Respondent-Employers

argue that Hale and Verducci forfeited their benefits under § 33(g) of the Act, which

terminates benefits when “the person entitled to compensation (or the person’s

representative) enters into a settlement with a third person” for the employee’s

disability or death for an amount less than that to which they would otherwise be

entitled under the Act and fails to obtain the approval of the employer before doing

so. Id. § 933(g).

** The Honorable R. Guy Cole, Jr., United States Chief Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation.

2 18-72869 Here, the settlements in question were not signed by the widows. Instead, the

settlements were between third parties and the decedents’ daughters, who were

successors-in-interest to certain legal claims their fathers filed while still alive. In

both cases, the United States Department of Labor’s Benefits Review Board (BRB)

determined that because the settlements bound all heirs—including the widows—

the agreements triggered the forfeiture provision and the widows’ Longshore Act

benefits were therefore terminated. Because we conclude that the forfeiture

provision was not triggered, we reverse the BRB orders and remand for further

proceedings consistent with this order.

We begin, as we must, with the text of the statute. Cowart, 505 U.S. at 475.

The parties agree, as do we, that the “person entitled to compensation” in each case

is the surviving spouse. Even if the widows were ultimately bound by the third-

party settlements signed by the daughters, no record evidence suggests that Hale or

Verducci personally “enter[ed] into a settlement with a third person.” 33 U.S.C. §

933(g)(1). There is similarly a dearth of record evidence to suggest that the

daughters acted as agents on the widows’ behalves. Indeed, California law specifies

that the daughters, as successors-in-interest, operated not on behalf of the widows

but instead on behalf of the decedents’ estates. See Cal. Civ. Proc. Code § 377.11.

That leaves the question whether any “person’s representative . . . enter[ed]

into a settlement with a third person” such that the forfeiture provision was triggered.

3 18-72869 33 U.S.C. § 933(g)(1). The statutory phrase “the person’s representative” refers to

the “legal representative of the deceased.” Mallott & Peterson v. Dir., OWCP

[Stadtmiller], 98 F.3d 1170, 1172 (9th Cir. 1996), overruled on other grounds by

Price v. Stevedoring Servs. of Am., Inc., 697 F.3d 820 (9th Cir. 2012) (en banc). The

phrase is therefore only applicable when a covered employee is deceased and may

only exert his or her Longshore Act claims through a legal representative. It does

not apply in circumstances like these where the Act’s benefits accrue to a living,

breathing “person entitled to compensation.”

In short: neither the “person entitled to compensation” nor any relevant

“representative” entered into a third-party settlement in either of these cases. See 33

U.S.C. § 933(g)(1). Consequently, § 33(g)’s forfeiture provision was never

triggered. We therefore reverse the orders of the Benefits Review Board and remand

for further proceedings consistent with this order.1

REVERSED AND REMANDED.

1 We grant BAE Systems’s unopposed motion for judicial notice of court filings related to Verducci’s husband’s civil claims. (18-73063, Dkt. No. 26.) We deny BAE Systems’s motion in footnote one of its Answering Brief in Case No. 18-72869 to strike certain of Hale’s arguments based on perceived violations of Circuit Rule 17-1.4(b) because any error was harmless.

4 18-72869 Hale v. BAE Sys. San Francisco Ship Repair, 18-72869 FILED Verducci v. BAE Sys. San Francisco Ship Repair, 18-73063 APR 17 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS GOULD, Circuit Judge, dissenting:

I respectfully dissent and would affirm the Benefits Review Board decisions

on the basis that Beverly Hale and Luz Verducci (“Petitioners”) “enter[ed] into”

third-party settlements without getting approval from decedents’ employers, thus

triggering the forfeiture provision under 33 U.S.C. § 933(g).

As the majority explains, § 33(g) of the Longshore and Harbor Workers

Compensation Act forfeits benefits when “the person entitled to compensation . . .

enters into” an unapproved third-party settlement. Id. I agree with the majority

that Petitioners were “person[s] entitled to compensation” under the Act and that

decedents’ daughters did not act as Petitioners’ agents when they executed the

third-party settlements. I disagree with the majority as to whether Petitioners

themselves entered into the settlements.

Black’s Law Dictionary defines “enter” as “to become a party to,” as in

“they entered into an agreement.” Enter, BLACK’S LAW DICTIONARY (11th ed.

2019). The majority concludes that Petitioners did not enter into the third-party

settlements because they did not sign the settlements and there is no record

evidence to suggest that either subjectively intended to become parties.

1 To determine whether Petitioners entered into the settlements, we must

apply California contract law and first look to the plain language of the

settlements. Golden v. Cal. Emergency Physicians Med. Grp., 782 F.3d 1083,

1089 (9th Cir. 2015). Under California contract law, courts must “give effect to

the mutual intention of the parties as it existed” at the time the contract was

executed by looking to the contract’s terms. Wolf v. Walt Disney Pictures &

Television, 76 Cal. Rptr. 3d 585, 601 (Cal. Ct. App. 2008) (quoting CAL. CIV.

CODE § 1636); see also CAL. CIV. CODE § 1638 (“The language of a contract is to

govern its interpretation, if the language is clear and explicit, and does not involve

an absurdity.”).

Here, as the majority acknowledges, the plain language of the settlements

binds Petitioners to its terms as “heirs” to the decedents. Accordingly, I read the

settlements as expressing an objective intention that Petitioners be bound by and

parties to the settlements. If Petitioners had filed disclaimers, or if the attorneys

who orchestrated the settlements—the same attorneys who represented

Petitioners—had specifically excluded Petitioners from the settlements, then the

settlements would not have evidenced such an intention. But that is not the case

here. I conclude that our panel is compelled by the plain language of the

agreements to affirm the Benefit Review Board decisions in the Hale and the

Verducci cases.