Lee D. Harper v. Zapata Off-Shore Company

741 F.2d 87, 1985 A.M.C. 979, 1984 U.S. App. LEXIS 18804
CourtCourt of Appeals for the Fifth Circuit
DecidedSeptember 7, 1984
Docket83-3149
StatusPublished
Cited by66 cases

This text of 741 F.2d 87 (Lee D. Harper v. Zapata Off-Shore Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lee D. Harper v. Zapata Off-Shore Company, 741 F.2d 87, 1985 A.M.C. 979, 1984 U.S. App. LEXIS 18804 (5th Cir. 1984).

Opinions

REAVLEY, Circuit Judge:

Lee D. Harper brought suit under the Jones Act and general maritime law for injuries suffered while working on Zapata Off-Shore Company’s drilling barge and for inadequate maintenance. By this appeal, Zapata challenges the award of punitive damages and the amount of compensatory damages and maintenance found by the jury. We reverse and remand.

I. Background

Harper was attempting to carry a 90-pound rotary coupling part from the heliport on Zapata’s drilling barge to a storage room below. While Harper was going down a steep flight of stairs, the barge shifted and he stumbled, injuring his back. The accident required Harper to have back surgery on two occasions to remove extrusions of ruptured discs. Following the incident Zapata paid for Harper’s medical expenses and gave him a check for $638 every two weeks. The check specified that $112 was for maintenance and that $526 was an "advance.” When Zapata learned that Harper was suing, it terminated the advances, but continued to pay maintenance of $8 a day ($112 every two weeks).

In a jury trial Harper sued for compensatory damages, increased maintenance, and attorney’s fees and punitive damages for Zapata’s failure to pay a proper amount of maintenance. The jury found that Zapata was negligent and that the vessel was un-seaworthy and awarded Harper $40 a day in maintenance, $1,000,000 in compensatory damages, $500,000 in punitive damages, and $5,000 in attorney’s fees. In response to Zapata’s motion for new trial, the district court reduced the punitive damages award to $250,000 on remittitur, which Harper accepted.

II. Punitive Damages and Attorney’s Fees

Zapata’s position in the briefs and at oral argument was that lump-sum punitive damage awards could not be grounded on a failure to pay maintenance. The seminal case of Vaughan v. Atkinson, 369 U.S. 527, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962), had been construed differently by the First and Second Circuits. Compare Kraljic v. Berman Enterprises, Inc., 575 F.2d 412 (2d Cir.1978) (Vaughan authorizes only attorney’s fees as punitive damages) with Robinson v. Pocahontas, Inc., 477 F.2d 1048 (1st Cir.1973) (traditional exemplary damages permitted if shipowner wantonly refuses to pay maintenance). We have recently agreed with the First Circuit that punitive damages for the willful and arbitrary refusal to pay maintenance are available under general maritime law. See Holmes v. J. Ray McDermott & Co., 734 F.2d 1110, 1118 (5th Cir.1984); see also In re Merry Shipping, Co., 650 F.2d 622 (5th Cir.1981) (Unit B) (punitive damages allowed for willfully and wantonly creating or maintaining unseaworthy conditions).

It does not follow, however, that punitive damages may be based on a shipowner’s failure to pay adequate maintenance. Zapata argues that the district court erred by allowing the jury to impose punitive damages merely because Zapata paid a maintenance rate that the jury later found to be inadequate. We agree. On this record, the district court should not have submitted the questions of punitive damages or attorney’s fees to the jury. See Boeing Co. v. Shipman, 411 F.2d 365 (5th Cir.1969) (en banc). Both awards must be grounded on the same type of egregious shipowner conduct exhibiting wanton and intentional disregard of a seaman’s rights. See Vaughan v. Atkinson, 369 U.S. 527, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962); Kraljic v. Berman Enterprises, Inc., 575 F.2d 412, 416 (2d Cir.1978).

[89]*89Harper does not dispute that Zapata consistently paid the traditional maintenance rate of $8 a day and designated those payments as maintenance. Instead, he attacks a settlement procedure employed by Zapata in dealing with injured employees. Every two weeks, while Harper was recuperating, Zapata paid him $526 as an “advance,” along with maintenance. In addition, Zapata twice provided Harper with $3000 to help out with household expenses and personal bills. Testimony established that Zapata had no intention of recovering these “advances,” but that the payments were made with a view toward settling claims without litigation.1 Zapata’s claims representative stated at trial that he informed Harper that he would not have to repay the advances, but that if he instituted suit, Zapata would terminate the advances and pay the $8 amount that it thought was its legal obligation.

During the examination of Zapata’s claims representatives, the district court instructed the jury that Zapata’s advances were not to be credited toward maintenance — “the advances [have] nothing to do with the proper amount of maintenance.”2 Yet the court, in referring to the punitive damages issue, told the jury that it “should consider the total actions of Zapata in connection with this case____”

We cannot escape the conclusion that the jury penalized Zapata for terminating its advances. During closing argument, Harper’s counsel repeatedly emphasized the millions of dollars Zapata saved with settlement efforts.3

For purposes of the punitive damages issue, the district court appeared to have considered the settlement advances as maintenance payments. The court stated that it “share[d] the jury’s apparent outrage produced by defendant’s intentional evil practice of attempting to prevent litigation by cutting the maintenance rate to a starvation level.” Harper v. Zapata OffShore Co., 563 F.Supp. 576, 585 (E.D.La. 1983). Despite stating that “the evidence supporting punitive damages was overwhelming,” the court cited only the termination of advances and the “starvation payment” of $8 a day. The district court did not find that the advances were maintenance payments in disguise, and the jury was not allowed to credit the advances toward Zapata’s maintenance payments. Therefore, we think it was improper to view termination of settlement efforts as an evil reduction in maintenance. The special verdict only asked, “Was defendant’s failure to pay an amount of maintenance higher than $8 per day intentional and with callous disregard for the plaintiff’s rights?”

The cases in which punitive damages or attorney’s fees have been granted share [90]*90the common element of a shipowner’s default, either in failing to provide maintenance and cure or in failing to investigate an injured seaman’s claim. See Vaughan v. Atkinson, 369 U.S. 527, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962) (shipowner exhibited willful and persistent default and did not investigate seaman’s claim); Holmes v. J. Ray McDermott & Co., 734 F.2d 1110

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Bluebook (online)
741 F.2d 87, 1985 A.M.C. 979, 1984 U.S. App. LEXIS 18804, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lee-d-harper-v-zapata-off-shore-company-ca5-1984.