Employers Insurance v. Moran

CourtCourt of Appeals of South Carolina
DecidedJune 26, 2006
Docket2006-UP-297
StatusUnpublished

This text of Employers Insurance v. Moran (Employers Insurance v. Moran) is published on Counsel Stack Legal Research, covering Court of Appeals of South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Employers Insurance v. Moran, (S.C. Ct. App. 2006).

Opinion

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals


Employers Insurance of Wausau, Plaintiff,

v.

Robert J. Moran and Eric C. Hansen, Defendants.


Eric C. Hansen, Third-Party Plaintiff,

Caldwell’s Diving Co., Inc., Third-Party Defendant,

Of whom Eric C. Hansen is the, Appellant,

And Employers Insurance of Wausau, Robert J. Moran and Caldwell’s Diving Co., Inc., are the, Respondents.


Appeal From Georgetown County
 James E. Lockemy, Circuit Court Judge
 Paula H. Thomas, Circuit Court Judge


Unpublished Opinion No. 2006-UP-297
Submitted June 1, 2006 – Filed June 26, 2006


AFFIRMED IN PART, REVERSED IN PART, AND REMANDED


Eric C. Hansen, of Tuckerton, N.J.; Pro Se.

John S. Wilkerson, III, Troy G. Thames, and R. Hawthorne Barrett, all of Charleston, Pope D. Johnson, III, of Columbia and Robert W. Achurch, III, and Mary Bass Lohr, both of Beaufort; for Respondents.

PER CURIAM:  Employers Insurance of Wausau (Wausau) sued attorney Robert J. Moran and Moran’s former client Eric C. Hansen to recover funds in Moran’s escrow account on which it claimed a lien for benefits paid to Moran under the Federal Longshore and Harbor Workers Compensation Act.[1]  In his responsive pleadings, Hansen filed counterclaims against Wausau and cross-claims against Moran.  After the trial court granted Moran’s request to interplead the disputed funds into the court, it granted summary judgment to Moran on Hansen’s cross-claims, dismissed some of Hansen’s counterclaims against Wausau, and dismissed third-party claims that Hansen later brought against Caldwell’s Diving (Caldwell), his former employer.  Hansen appeals.  We affirm in part, reverse in part, and remand.[2]

FACTS

On April 17, 1991, Hansen, while working for Caldwell as a commercial diver, was seriously injured when a crane became detached and fell on him.  Although Hansen resided in New Jersey, the accident occurred at the Port Royal Sound in Beaufort, South Carolina. 

Wausau provided insurance for Caldwell, including coverage under the LHWCA and the Jones Act.[3]  Pursuant to the LHWCA, Wausau, on Caldwell’s behalf, paid Hansen voluntary medical and disability benefits totaling $181,160.04.

In November 1993, after Hansen applied for compensation under the LHWCA, Moran sued Caldwell on Hansen’s behalf in the Beaufort County Court of Common Pleas alleging Caldwell was negligent under the Jones Act and breached certain duties relating to seaworthiness.  After this action was filed, Wausau discontinued paying Hansen LHWCA benefits.[4]

The parties settled the lawsuit in 1996.  Under their agreement, Hansen’s total settlement was $1,320,325.88.  This amount included a waiver by Wausau of a lien it claimed on $181,160.04 that it had paid to Hansen under the LHWCA.  The waiver of the lien, however, was contingent on approval of the settlement by the United States Department of Labor pursuant to § 908(i) of the LHWCA.[5]

Hansen received $1,139,165.84, representing the “cash” portion of the settlement after the deduction of counsel fees and costs.  Moran retained $181,160.04, the amount of the lien, in his escrow account pending approval of the settlement by the Department of Labor. 

Hansen executed the necessary documents to effect the settlement; however, the district director of the Department of Labor “tolled” the approval period because of insufficient information.  Later, however, Hansen informed the director he was not ready to settle the claim, prompting the director to “shelve” the settlement approval pending submission of a new petition and Hansen’s agreement to proceed.

Moran later ceased acting as Hansen’s attorney, but retained the $181,160.04 in his escrow account pending resolution of Wausau’s claimed lien.  Moran claimed he was properly withholding the disputed funds under the South Carolina Rules of Professional Conduct.  Moran’s law firm produced an attorney-client settlement statement detailing fees and costs and reducing the amount disbursed to Hansen by these amounts.  The fees were calculated based on the total amount of the settlement, including the escrowed funds.

By order dated August 7, 1998, a federal administrative law judge in Camden, New Jersey, found Hansen was not entitled to benefits or attorney fees under the LHWCA because he was classified as a seaman.  The order did not address Wausau’s prior payments or the claimed lien.  On or about November 26, 2001, the United States Supreme Court denied certiorari on Hansen’s appeal of this order, thus in effect upholding the determination that Hansen was ineligible to recover under the LHWCA.

By letter dated April 17, 2001, the Department of Labor disapproved the settlement and further advised Hansen the funds in Moran’s escrow account “must be repaid to the employer/insurer as a result of their lien due to benefits paid voluntarily under the [LHWCA].”  On January 15, 2003, however, the Department sent another letter stating “our office has no authority to determine the proper ownership of those funds.  Therefore, it was a regrettable error when we advised Mr. Hansen . . . that the $181,000 held in escrow from the Jones Act settlement must be repaid to the employer/carrier.”  The Department further advised in the second letter that “the [LHWCA] does not have any provision for recoupment of benefits erroneously paid, except as a credit against future compensation payable.”

On December 5, 2002, Wausau commenced this action in the Georgetown County Court of Common Pleas against Hansen and Moran to recover the escrowed funds.  Hansen hired a new attorney and counterclaimed against Wausau, alleging causes of action for collection, breach of contract accompanied by a fraudulent act, and unfair trade practices.  Hansen also filed a cross-claim against Moran, alleging causes of action for collection, breach of contract accompanied by a fraudulent act, negligence, breach of trust, and unfair trade practices.

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Employers Insurance v. Moran, Counsel Stack Legal Research, https://law.counselstack.com/opinion/employers-insurance-v-moran-scctapp-2006.