England v. Reinauer

• Court: Court of Appeals for the First Circuit
• Decided: October 25, 1999
• Docket: 99-1253
• Status: Published

Opinion

USCA1 Opinion

                 United States Court of Appeals

                     For the First Circuit


No. 99-1253



                         JOSEPH ENGLAND,



                       Plaintiff, Appellee,



                                v.



             REINAUER TRANSPORTATION COMPANIES, L.P.,



                      Defendant, Appellant.



                      ____________________

                                

                HALE INTERMODAL MARINE COMPANY,

                                

                      Defendant, Appellee.


APPEAL FROM THE UNITED STATES DISTRICT COURT

                                

               FOR THE DISTRICT OF MASSACHUSETTS

                                

        [Hon. Douglas P. Woodlock, U.S. District Judge]


Before

                                

                      Lipez, Circuit Judge,

          Coffin and Campbell, Senior Circuit Judges.


Seth S. Holbrook with whom Stephanie J. Lyons was on brief for

appellant.

     David J. Ansel for Joseph England.


October 22, 1999


COFFIN, Senior Circuit Judge.  In June 1996, longshoreman 

Joseph England was seriously injured when a mooring line, binding

a barge to the pier on which he was working, burst and struck him

in the knee.  Appellee England brought claims of negligence under

the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 

901-950, against both the tug boat owner and the barge owner.

Following the jury's verdict that all three parties were partially

negligent, the tug owner filed post-judgment motions seeking a new

trial on various grounds.  The tug company appeals the denial of

its motions.  Finding no error, we affirm.

                          I.  Background

     We relate the facts in the light most favorable to the jury's

verdict consistent with support in the record.  See United States

v. Rodriguez, 162 F.3d 135, 140 (1st Cir. 1998).  On June 25, 1996,

England, a longshoreman employed by P&W Marine Service, was

overseeing a gang of twelve longshoremen unloading and then loading

cargo onto a barge, the Norfolk Trader.  The tug John Reinauer,

owned by Reinauer Transportation Company, towing the unmanned barge

Norfolk Trader, owned by Hale Intermodal Marine Company, arrived at

Moran Terminal at approximately 5:00 a.m.  The tug crew secured the

mooring lines on the barge; a team of line handlers received the

lines thrown off the barge by the tug crew and placed them over

bollards on the pier.  The line handlers were employed by Hale for

the limited purpose of assisting with the mooring and unmooring of

the barge, but were not on site during cargo operations.  

     At approximately 8:00 a.m., just before the longshoremen were

to begin unloading the barge, the tug crew inspected the mooring

lines. The longshoremen ceased working for ten minutes at

approximately 10:00 a.m., awaiting further loading instructions. 

The tug crew did not inspect the mooring lines during that break. 

Between 10:30 and 10:45, the tug's captain left the boat to make a

phone call and testified that from the bow of the barge he viewed

the entire row of mooring lines tying the barge to the pier. 

Shortly thereafter, the line attaching the stern of the barge to

the pier burst, striking England, fracturing his kneecap, and

rendering him disabled as a longshoreman.  After a trial in October

1998, the jury found all three parties to be contributorily

negligent and awarded England damages based on the following

division of fault: Reinauer   58%; Hale   35%; England   7%.  The

jury was not, however, asked to specify what duty or duties it

found each party to have breached. 

     During its cross-examination of England, Reinauer was

prevented from introducing evidence that England received workers'

compensation and medical benefits during his unemployment. 

Following the close of England's case-in-chief, Reinauer made a

motion, which it renewed several times thereafter, for judgment as

a matter of law or in the alternative a new trial, contending,

inter alia, that the evidence was insufficient to establish that it

owed England any duty and that the court had erred by excluding

evidence of England's collateral source benefits.  Reinauer also

filed a post-judgment motion for disclosure of the terms of a

settlement agreement that was reached by Hale and England after the

close of all evidence but before the jury's verdict.  On appeal,

Reinauer contends that the court erred in denying its motions.

                         II.  Discussion

     We begin with a brief acknowledgment of the appropriate

standards of review.  We review the court's denial of Reinauer's

motion for judgment as a matter of law de novo, but we examine the

"evidence and the inferences to be extracted therefrom in the light

most hospitable to the nonmovant, and may reverse the denial of

such a motion only if reasonable persons could not have reached the

conclusion that the jury embraced."  Sanchez v. Puerto Rico Oil

Co., 37 F.3d 712, 716 (1st Cir. 1994).  We review the court's denial

of Reinauer's alternative request for a new trial for an abuse of

discretion, recognizing that "the trial judge may set aside a

jury's verdict only if he or she believes that the outcome is

against the clear weight of the evidence such that upholding the

verdict will result in a miscarriage of justice."  See Conway v.

Electro Switch Corp., 825 F.2d 593, 598-99 (1st Cir. 1987). 

Finally, regardless of whether Reinauer's motion for disclosure of

the terms of the Hale-England post-trial settlement agreement is

categorized as a discovery request (because it seeks disclosure to

itself and to the court) or an evidentiary request (because it

seeks disclosure to the jury), the court's disposition of the

motion is committed to its sound discretion.  See Santiago v.

Fenton, 891 F.2d 373, 379 (1st Cir. 1989) (stating that the trial

court has broad discretion in determining the scope of discovery);

United States v. Cardales, 168 F.3d 548, 557 (1st Cir. 1999) (noting

that evidentiary rulings are reviewed for an abuse of discretion).

     A.  Reinauer's Duty to England

     The Longshore and Harbor Workers' Compensation Act (LHWCA), 33

U.S.C.  901-950, establishes workers' compensation benefits for

longshoremen injured in work-related accidents.   See 33 U.S.C. 

903(a).  Regardless of fault, the longshoreman's employer must

compensate the injured worker and his or her family with medical,

disability, and death benefits.  See id.  904, 907-909.  The

LHWCA also allows a longshoreman to seek damages against a third-

party vessel owner for injuries resulting from the vessel's

negligence.  See id.  905(b).  The statute does not define what

actions constitute negligence, and thus individual questions must

be resolved largely by the application of general tort principles. 

See Howlett v. Birkdale Shipping Co., 512 U.S. 92, 97-98 (1994).  

     The Supreme Court has, however, in Scindia Steam Navigation

Co. v. De Los Santos, 451 U.S. 156 (1981), provided guidance as to

the main attributes of a shipowner's duty to longshoremen.  In

Scindia Steam, the Court outlined the application of   905(b) to

relations between a longshoreman and a vessel owner and placed the

primary responsibility for avoiding accidents on the stevedore

because he was "in the best possible position to avoid accidents

during cargo operations."  See id. at 164-72.  Generally, the

vessel owner has the right to expect that the stevedore will

perform his task safely and properly "without supervision of the

ship."  See id. at 170.  Nevertheless, the Court noted situations

in which a shipowner's duty to exercise due care arises and

delineated three aspects of the duty.  See id. at 166-72; see also

Howlett, 512 U.S. at 98 (characterizing the Scindia Steam decision

as outlining three aspects of the shipowner's duty).

     First, the shipowner has a "turnover duty" to warn the

longshoremen of hazards from gear, equipment, tools, and workspace

to be used in cargo operations "[t]hat are known to the ship or

should be known to it in the exercise of reasonable care."  Scindia

Steam, 451 U.S. at 167; see also Howlett, 512 U.S. at 98.  Second,

the vessel is liable for a breach of its "active control duty" if

it "actively involves itself in the cargo operations and

negligently injures a longshoreman" or "if it fails to exercise due

care to avoid exposing longshoremen to harm from hazards they may

encounter in areas, or from equipment, under the active control of

the vessel during the stevedoring operation."  Scindia Steam, 451

U.S. at 167; see also Howlett, 512 U.S. at 98.   Third, under the

"duty to intervene," the shipowner has a duty only if "contract

provision, positive law, or custom" dictates "by way of supervision

or inspection [that the shipowner] exercise reasonable care to

discover dangerous conditions that develop within the confines of

the cargo operations that are assigned to the stevedore."  Scindia

Steam, 451 U.S. at 172 (holding that when no contract, positive

law, or custom was alleged, shipowner was not responsible for

dangerous condition arising during cargo loading operations); see

also Howlett, 512 U.S. at 98.

     Regarding the turnover duty, England concedes that a breach of

this duty was not a possible basis for the jury's verdict. For ease

of discussion, we turn now to the duty primarily in dispute,

Reinauer's custom-generated duty to intervene, and we conclude with

a brief discussion of Reinauer's active control duty.  We note that

Reinauer does not allege that the evidence was insufficient to

support findings that the elements of negligence, other than the

duty, were established.

     Regarding Reinauer's duty to intervene, England presented

evidence that a custom existed in the Port of Boston, encompassing

the Charlestown Moran Terminal, that the tug crew not only

initially moored the barge to the pier, possibly with the help of

line handlers hired by the barge company, but also inspected and

adjusted the mooring lines before cargo loading operations began as

well as during breaks in the longshoremen's work. Mooring lines

require periodic checking to ensure that they do not become

exceedingly tight or slack due to the competing forces on them,

such as alterations and shifts in the weight on the barge or 

movements of the tide. It was generally agreed that the need for

safety on the pier and barge was at its peak while the longshoremen

were working and that the adjustment of lines during active cargo

loading could be unsafe.  

     A "custom" can be defined generally as a "habitual practice or

course of action that characteristically is repeated in like

circumstances."  Black's Law Dictionary 385 (6th ed. 1990). 

Testimony at the trial regarding the alleged custom was provided by

several witnesses.  First, England testified that during his

sixteen years as a longshoreman in Boston, he had not received

training in the handling of mooring lines.  England maintained that

he had never been relied upon to attach, tighten, or slacken lines

and that the responsibility had always been assigned exclusively to

the tugboat crew and the barge agent.  He commented that on the

date of the accident he had not made any particular note of the

lines and, indeed, he did not have the skill to observe whether a

line was too tight or too slack.  England stated that on occasion

he had been informed by the crane operator that the lines were

slack and the barge was pulling away from the pier, and that upon

the relay of that information to the tug crew, the crew would

tighten the lines.

     Second, George Sargent, a ship supervisor employed by

Massachusetts Port Authority to work at the Moran Terminal,

testified that it was a custom and practice in the Port of Boston

at the time of England's injury  for "the tending of lines [to be

done] by the ship, the tugboats, or, in certain cases, the [barge]

agents" and that longshoremen did not have responsibility for

tending lines.  Third, Matthew Crimson, barge operations manager

for Hale, agreed that it was consistent with his experience in the

Port of Boston that the tug crew maintained mooring lines.

     Fourth and most telling, Frederick Weber, captain of the tug,

stated that on his "few dozen" trips into the Moran Terminal towing

unmanned barges, the tug crew would secure the barge to the pier

upon arrival, inspect the lines before the cargo operations began,

and recheck the lines while the longshoremen were on break. Captain

Weber testified that by "inspecting" the mooring lines, he meant

that the tug crew "would walk over and check on them to make sure

that they are not too tight, that the barge is up against the dock,

secure in place, and it's safe for people to come back and forth." 

     Although Captain Weber insisted that the tug crew was not

"required" to inspect the lines, he conceded that they did so

customarily as a matter of good seamanship.  He also noted that he

had been requested to adjust the lines in the past by a

longshoreman or barge agent.  Captain Weber stated that on the day

of England's injury the tug crew checked the mooring lines at

approximately 8:00 a.m., just before the longshoremen began work,

and that, although they did not undertake a  formal check during

the longshoremen's 10:00 break, when he left the tug at

approximately 10:30 to make a phone call in the terminal, he was

able to view the lines along the barge and determine that

"everything looked fine."

     On appeal, Reinauer contends first that the custom alleged by

England did not exist and second that even if a custom existed,

custom alone is insufficient to establish a duty.  We reject

outright Reinauer's first argument that there was insufficient

evidence to support a finding of custom.  Although Reinauer

argues that it had no duty to continuously monitor the condition of

the mooring lines and make adjustments as cargo operations were

occurring, an abundance of evidence lent itself to a finding that

it was a custom in the Port of Boston for the tug crew to inspect

and adjust the mooring lines before the cargo loading operations

began and during breaks in the work.  Not only was there ample

evidence of such a custom, but the most conclusive testimony came

from Reinauer's own Captain Weber.  

     In support of its second argument, Reinauer relies on Florida

Fuels, Inc. v. Citgo Petroleum Corp., 6 F.3d 330 (5th Cir. 1993). 

In that case, a vessel crew member drowned after falling from a

ladder providing access from the dock to the vessel and his family

filed a maritime tort action against the vessel owner as well as

the dock owner.  See id. at 331.  The Fifth Circuit held, without

citation, that although "custom itself does not create [a] duty,"

it might be relevant to the standard of care once a duty has been

found to exist.  See id. at 334.  That case, however, was not

brought under the LHWCA, because it did not involve a

longshoreman's claim, and therefore the Scindia Steam outline of a

shipowner's duties to longshoremen was not applicable.

     The plain language of Scindia Steam clearly suggests that

custom alone is sufficient to create a duty owed by a vessel to a

longshoreman.  Although in few cases has custom alone been alleged

to establish a duty, other courts have noted that the Scindia Steam

decision indicates that, if a custom did exist, it would establish

a duty.  See, e.g., Keller v. United States, 38 F.3d 16, 32 (1st

Cir. 1994) (stating that "post-'turnover' duty may arise if the

vessel owner was obligated, by contract, statute or custom, to

monitor stevedoring operations for the purpose of detecting and

remedying unsafe conditions"); Kirsch v. Plovidba, 971 F.2d 1026,

1031 (3rd Cir. 1992) (reciting Scindia Steam language); Spence v.

Mariehamns R/S, 766 F.2d 1504, 1507-08 (11th Cir. 1985) (considering

whether evidence of custom sufficient); Sarauw v. Oceanic

Navigation Corp., 655 F.2d 526, 529 (3rd Cir. 1981) (Adams, J.,

concurring) (suggesting that custom of "good seamanship" could

create duty).  Further, the limited scope of the custom established

in this case   that the vessel crew has responsibility for

inspecting and adjusting mooring lines before cargo operations and

during breaks in the loading only in the Port of Boston   does not

in any way contravene the overarching principle enunciated in

Scindia Steam that vessel owners are not responsible for generally

overseeing cargo operations.

     Moreover, regardless of whether Reinauer owed England a

custom-generated duty to intervene, the jury would have been

warranted in finding that Reinauer owed England an active control

duty.  The active control duty "recognizes that although a vessel

owner no longer retains the primary responsibility for safety in a

work area turned over to an independent contractor, no such cession

results as relates to areas or equipment over which the vessel's

crew retains operational control."  Manuel v. Cameron Offshore

Boats, 103 F.3d 31, 34 (5th Cir. 1997). 

     Reinauer argues that it did not have active control over the

area where the mooring line parted on the day of the accident and

completely ignores that strand of the active control duty that

extends to equipment over which the vessel retains control.  See

Scindia Steam, 451 U.S. at 167 (stating that the vessel owner may

be liable "if it fails to exercise due care to avoid exposing

longshoremen to harm from hazards they may encounter in areas, or

from equipment, under the active control of the vessel"); see also

Torres v. Johnson Lines, 932 F.2d 748, 750 (9th Cir. 1991)

(considering whether vessel had exerted active control over loading

ramps).  England contends that the mooring lines were within the

exclusive control of the tug crew and barge agent as evidenced by

the tug crew's morning inspection of the lines on the day of the

accident, Captain Weber's mid-morning check of the lines, the

vessel crew's admitted practice of reviewing the lines at certain

intervals, and the longshoremen's lack of knowledge about the

tending of mooring lines.  The evidence presented by England was

ample to allow the jury to find that Reinauer retained operational

control over the mooring lines and thus had an active control duty

to inspect and adjust them. 

     B.  Exclusion of Evidence of England's Collateral Source

Benefits

     Reinauer also argues that the court's exclusion of evidence

that England received collateral source income and medical benefits

under the LHWCA was an error that requires it be granted a new

trial.  Reinauer contends that the evidence should have been

admitted because it was relevant to England's credibility as well

as his motive for not returning to work.  Reinauer alleges that

England opened the door to this evidence by testifying that he

returned to work for a trial period after the accident "to be

productive and make some money to pay some bills" and that a non-

union job would provide insufficient income.

     The substantive aspect of the collateral source rule in

Massachusetts provides that "compensation received from a third

party unrelated to a tortfeasor-defendant (the collateral source)

will not diminish an injured party's recovery from that

tortfeasor."  Fitzgerald, P.P.A. v. Expressway Sewerage Constr.,

Inc., 177 F.3d 71, 73 (1st Cir. 1999) (citing Jones v. Wayland, 374

Mass. 249, 262, 373 N.E.2d 199, 207 (1978); Goldstein v. Gontarz,

364 Mass. 800, 809, 309 N.E.2d 196, 203 (1974)).  When a case is

being heard in federal court, the evidentiary, as opposed to the

substantive, aspects of the collateral source rule are governed by

the Federal Rules of Evidence, particularly Rules 401, 402, and

403.  See Fitzgerald, 177 F.3d at 74.   Under the evidentiary

strand of the collateral source rule, "[e]vidence of collateral

benefits offered to show that an employee has already received

compensation for his injuries is generally inadmissible."  Torres,

932 F.2d at 752.  When such evidence is relevant to some other

contested issue, however, it may be admitted if it is not unfairly

prejudicial; the risk of unfair prejudice from the admission of

this type of evidence must be weighed carefully because "a jury,

informed, say, that a plaintiff has recourse to first party

insurance proceeds, may be unduly inclined to return either a

defendant's verdict or an artificially low damage award." 

Fitzgerald, 177 F.3d at 75.

     Reinauer relies on Fitzgerald, in which the court upheld the

admission of collateral source benefits evidence when the victim's

mother testified that the medical bills resulting from the victim's

accident had financially strained the family.  See id. at 75-76. 

Reinauer also references Corsetti v. Stone Co., 483 N.E.2d 793

(Mass. 1985), in which the Massachusetts Supreme Judicial Court

upheld the introduction of evidence of collateral source benefits,

when the victim's motivation was a genuine issue at trial, to

contradict the victim's extensive testimony of the "lack of money"

that he experienced as a result of his injuries.  See id. at 803-04.

     England's testimony in this case, however, was not sufficient

to imply that he was suffering such financial difficulties as to

negate impliedly the receipt of any additional benefits due to the

accident and thus did not open the door for the introduction of his

collateral source benefits.  Moreover, the court noted, when

preventing Reinauer from inquiring into England's collateral source

benefits on cross-examination, that the jury was likely aware that

England was receiving workers' compensation benefits.  Further,

England testified on direct examination that if he took a non-union

job he would be expelled from the union and would thus lose his

health benefits, implying that he continued to receive medical

benefits while unemployed.  Thus, the district court could

reasonably have concluded that the evidence of England's collateral

source benefits, even if relevant to his credibility or his motive

for not returning to work, would have been cumulative as well as

unfairly prejudicial to England and did not abuse its discretion in

excluding it.

     C.  Disclosure of the Hale-England Settlement Agreement

     Finally, Reinauer contends that the court's denial of its

post-judgment motion for disclosure of the terms of the settlement

agreement between Hale and England was error because the agreement

was a "Mary Carter" agreement and thus unfairly prejudicial to

Reinauer.  A "Mary Carter" agreement, occurring in multi-party

litigation, derives its name from Booth v. Mary Carter Paint Co.,

202 So. 2d 8 (Fla. Dist. Ct. App. 1967), and, although it has been

characterized many ways, can be summarized as an agreement in

which:

          (1) the liability of the settling defendant is limited

     and the plaintiff is guaranteed a minimum recovery; (2)

     the settling defendant remains a party to the pending

     action without disclosing the full agreement to the

     nonsettling defendants and/or the judge and jury; and (3)

     if judgment against the nonsettling defendant is for more

     than the amount of settlement, any money collected will

     first offset the settlement so that the settling

     defendant may ultimately pay nothing.



Banovz v. Rantanen, 649 N.E.2d 977, 980 (Ill. App. Ct. 1995). 

"Mary Carter" agreements have been widely criticized as unfair and

against public policy.  See, e.g., John E. Benedict, Note, "It's a

Mistake to Tolerate the Mary Carter Agreement," 87 Colum. L. Rev.

338  (1987) (contending that "Mary Carter" agreements prejudice

nonsettling defendants, destroy equitable contribution of

defendants, and contradict legal ethics).

     The Hale-England agreement fails in several essential respects

to be a "Mary Carter" agreement.  First, it was not kept secret;

all parties as well as the court were apprised at various points in

the trial of the ongoing negotiations between Hale and England. 

For example, on October 5, the second day of trial, England's

counsel informed the court and all parties, in chambers, that

England had reached a tentative settlement with Hale, but that its

finalization was dependent on the court's ruling on Hale's motion

in limine to exclude from evidence a contract between Hale and

Reinauer.  Second, because it was endorsed on October 13, after the

case had been submitted to the jury, the settlement cannot be

guilty of altering the parties' behavior during trial.  Third,

England represents that the agreement established a settled sum,

not contingent on the jury's verdict.  For all of these reasons,

the agreement did not subversively motivate Hale and England to

join in undermining Reinauer's defense; the adversarial nature of

the relationship between Hale and Reinauer was already established

by their roles as co-defendants and their cross-claims for

indemnification and contribution.

     Given that the Hale-England agreement does not fall into the

"Mary Carter" category, the issue reveals itself to be the simpler

question of whether the court abused its considerable discretion by

refusing to force Hale and England to disclose the terms of its

post-trial agreement to Reinauer, the court, and the jury.   As we

have already explained, the timing of the settlement was such that

it did not alter the relationships between the parties and thus

disclosure of its terms to Reinauer or the court was unnecessary. 

Moreover, it is doubtful that the court would have informed the

jurors of the terms of the settlement since they had already

entered deliberations requiring them to specify the degree of fault

of each party.  For these reasons, we hold that the court did not

err by denying Reinauer's disclosure request.  

     Because we find no error in the court's post-trial rulings, we

affirm its judgment.

     Affirmed.