Dearmond v. Southwire Co.

109 F. App'x 722
CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 24, 2004
DocketNo. 02-5818
StatusPublished
Cited by1 cases

This text of 109 F. App'x 722 (Dearmond v. Southwire Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dearmond v. Southwire Co., 109 F. App'x 722 (6th Cir. 2004).

Opinion

PER CURIAM.

This diversity action was filed by plaintiff Kathy DeArmond, whose husband suffered fatal head injuries when he fell from a barge on which he was working in his capacity as a longshoreman for the defendant, Southwire Company. Although Southwire conceded its liability as an employer under the no-fault provisions of [723]*723§ 904(b) of the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. §§ 901-950 (2001) (the Act), the plaintiff claimed that Southwire was also liable under § 905(b)’s “dual capacity” provision because it was the pro hac vice owner of the barge that her husband had been unloading when he fell. The barge was actually owned by American Commercial Barge Line (“American Barge”), which had contracted with Southwire to deliver raw materials to its aluminum processing plant. After first granting the defendant’s motion for summary judgment on the question of “dual capacity” liability under § 905(b), the district court later vacated that order without further explanation and allowed the case to go to trial. The result was a jury verdict in the plaintiff’s favor against Southwire for $3.595 million that included punitive damages.

The defendant contends on appeal that it was entitled to judgment in its favor as a matter of law, that a jury instruction on imputed knowledge was legally erroneous, and that the award of punitive damages was improper. Because we hold that the original order granting summary judgment to the defendant should not have been vacated, we reverse the judgment of the district court and enter judgment for the defendant.

FACTUAL AND PROCEDURAL BACKGROUND

At the time of the events giving rise to this litigation, Southwire operated an aluminum smelter located on the Ohio River at Owensboro, Kentucky. The smelting process required a constant flow of raw materials, which were delivered to South-wire’s river terminal by American Barge, under contract to Southwire to haul alumina and coke from Louisiana to the Kentucky facility. When the barges arrived, they were tied to a drop-off cell some 30 or 40 feet from the terminal and remained there until a Southwire tugboat maneuvered them, one at a time, into place at the dock. Once there, a large-scale vacuum unloader would suction the cargo out of the barge and deposit it on a conveyor belt running directly into the smelter.

On the day he died, John DeArmond, a relatively new Southwire longshoreman, was in the process of unloading one of the barges positioned at the dock when he lost his balance and fell approximately 18 feet from his position on the hatch cover into an empty cargo hold. A later investigation indicated that a locking pin used to secure the hatch cover had broken, causing the cover to slide unexpectedly. There was also evidence that the break was caused because Southwire was utilizing an unadvisable method of securing the barge covers that placed excessive stress on the locking pins, causing them to break “every once in a while.” In fact, after monitoring Southwire’s stevedore operation, American Barge had warned that the unloading procedure was unsafe and was causing damage to the barges. However, Southwire took the position that it could not change its unloading method because of the design of the dock.

On behalf of her husband’s estate, the plaintiff filed suit against Southwire as a vessel owner pro hac vice and against American Barge as the actual vessel owner. The district court initially granted Southwire summary judgment, based on its conclusion that Southwire was not the vessel owner pro hac vice as a matter of law. However, after hearing argument on the plaintiffs motion to alter or amend, the district court vacated its summary judgment order, for reasons that are not clear, and set the case for trial against both Southwire and American Barge. The jury that heard the case exonerated American Barge but found that Southwire was a “vessel” (as defined in the jury instructions) and that “Southwire violated its ac[724]*724tive control duty” and “its duty to intervene,” resulting in the death of John DeArmond. The jury fixed compensatory damages at $1.095 million and also imposed punitive damages in the amount of $2.5 million, resulting in an award of $3.595 million.

Posttrial, the district court denied the defendant’s motion for judgment as a matter of law, and this appeal followed.

DISCUSSION

The Longshore and Harbor Workers’ Compensation Act “establishes a comprehensive federal workers’ compensation program that provides longshoremen and their families with medical, disability, and survivor benefits for work-related injuries” occurring on the navigable waters of the United States. Howlett v. Birkdale Shipping Co., 512 U.S. 92, 96, 114 S.Ct. 2057, 129 L.Ed.2d 78 (1994). In 1972, the Act was amended to increase the statutory benefits for injured longshoremen and to shift more responsibility for compensation to the party best able to prevent the injuries: the stevedore-employer. See Howlett, 512 U.S. at 97, 114 S.Ct. 2057. As with most workers’ compensation programs, an employer must pay statutory benefits regardless of fault but is shielded from further liability. See id.; 33 U.S.C. §§ 904, 905(a).

The Act does provide one exception to the exclusive-remedy provision in § 905(a). Under § 905(b), a longshoreman may also seek damages from a third-party in a negligence action against the owner of a vessel on which the employee is injured. “Thus, in the typical tripartite situation, the longshoreman is not only guaranteed the statutory compensation from his employer; he may also recover tort damages if he can prove negligence by the vessel. The second sentence of § [90]5(b) makes it clear that such a separate action is authorized against the vessel even when there is no independent stevedore and the longshoreman is employed directly by the vessel owner.” Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523, 530, 103 S.Ct. 2541, 76 L.Ed.2d 768 (1983). When the stevedore operation and the vessel are alleged to be one and the same entities, such as Southwire was in this case, the arrangement is commonly referred to as a “dual capacity” case. See Gravatt v. City of New York, 226 F.3d 108, 121 (2nd Cir.2000). However, as the defendant notes, the “dual capacity” model is aimed principally at shipowners who run their own stevedoring operation, a reasonably frequent occurrence. That, of course, was not the situation here.

The plaintiff nevertheless argued to the district court that this case should be treated as a “dual capacity” situation, contending that Southwire was an owner pro hac vice of the barge in question or, alternatively, that there were questions of disputed fact from which a jury could find that Southwire was an owner pro hac vice of the barge. The district court, in a well-reasoned opinion, rejected both arguments, finding first that there was no dispute about the facts, which were “known and ...

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