The opinion of the court was delivered by: KNOX
The facts of this case are simple. The plaintiff slipped and fell upon ice and snow on the deck of the defendant's barge sustaining serious injuries. However, careful consideration of the legal issues arising from this injury leads the court to agree with Judge Friendly's observation that admiralty law constitutes a "wonderland"
and with the observation of Judge Teitelbaum of this court that this area of the law is riddled with a "byzantine maze of exceptions and fine distinctions".
The court initially notes that most of the discussion in this opinion will not apply to accidents occurring after the effective date of the 1972 amendments to the longshoreman's and harbor workers compensation act which eliminated the doctrines of unseaworthiness and indemnity in admiralty cases. (33 U.S.C. § 901 et seq. as amended 1972).
The plaintiff in this case was an employee of the third party defendant, the Pittsburgh and Lake Erie Railroad Company (hereinafter R&LE). The P&LE was under contract with the Youngstown Sheet & Tube Company to unload coal at the Colonna dock, in the Ohio River near Monaco, Beaver County, Pennsylvania.
At about 7:30 a.m. on February 6, 1972, the plaintiff, a member of the P&LE's labor crew, was instructed by a superior to round two barges at the Colonna dock. "Rounding" is a process of manually shifting the positions of barges by letting the current take them around. It had been snowing since early that morning and several inches of snow had accumulated on the deck of the barge. Mr. Dobbins slipped and fell on the "gunnel" while in the process of rounding the barges.
On January 18, 1974, plaintiff filed suit against P&LE under the Jones Act at Civil Action Number 74-50 in this court. This lawsuit was settled on January 20, 1975, for $85,000. The release signed by the plaintiff and the P&LE is appended hereto as Appendix A and its effect will be discussed at length in parts one and two of this opinion, infra.
The present, the second lawsuit, was filed by the plaintiff on January 21, 1975, on the basis of unseaworthiness and the Jones Act. On May 13, 1975, a third party claim was filed against the P&LE by Crain Brothers seeking indemnification and/or contribution.
A four-day jury trial was held on plaintiff's second lawsuit on May 10 through 13, 1976. The court directed a verdict for Crain Brothers on the Jones Act issue because the record disclosed no evidence that the plaintiff was an employee of Crain Brothers. The rest of the case was submitted to the jury on the basis of a special verdict and the jury's findings have been appended hereto as Appendix B.
On May 14, 1976, in accordance with the verdict a judgment order was entered against the defendant in favor of the plaintiff in the amount of $240,000. (The $320,000 verdict minus $80,000 for the plaintiff's 25% contributory fault.) Motions for a new trial, for judgment NOV and to amend judgment were subsequently filed by Crain Brothers on May 21, 1976, and a motion to amend judgment as filed by the plaintiff on May 21, 1976. Different counsel now represents Crain Brothers.
The motions require the court to consider ten issues:
(1) Does the settlement of Civil Action No. 74-50 bar the present suit?
(2) If not a bar, should the settlement of Civil Action Number 74-50 offset the recovery in this case? If so, to what extent?
(3) Should the jury's finding that Crain Brothers breached a duty owed to the plaintiff to maintain a seaworthy vessel be upheld?
(4) If the plaintiff can recover against Crain Brothers pursuant to the foregoing questions, is Crain Brothers entitled to contribution from the P&LE?
(5) If the plaintiff can recover against Crain Brothers pursuant to the foregoing questions, is Crain Brothers entitled to indemnity from the P&LE?
(6) If Crain Brothers can recover from P&LE under Question 4 or 5, what is the proper amount of this recovery?
(7) Was the verdict of $320,000 excessive?
(8) Did the court err in admitting evidence of Crain Brothers insurance?
(9) What effect, if any, does the plaintiff's contributory negligence have on his total recovery?
(1) Bar by Previous Settlement.
In the case of Leach v. Mon River Towing, Inc., 363 F. Supp. 637 (W.D.Pa.1973), Judge Snyder held that the effect of releases in the field of admiralty law must be governed by federal law. Judge Snyder further held that:
"While there are no Supreme Court cases dealing specifically with the application to seamen, the court has expressed its views on this subject in other types of cases, such as in Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 84 S. Ct. 1526, 12 L. Ed. 2d 457 (1964), (patent infringement), to the effect that the release of one tortfeasor releases all unless the release expressly reserves the right against the other joint tortfeasor." 363 F. Supp. at 644.
The other major Supreme Court case in this area, other than Aro, discussed by Judge Snyder, is Zenith Radio Corp. v. Hazeltine Research, 401 U.S. 321, 91 S. Ct. 795, 28 L. Ed. 2d 77 (1970). In Zenith, the Supreme Court discussed three possible methods of interpreting releases. The "ancient common law rule, which was grounded upon a formalistic doctrine that a release extinguished the cause of action to which it related, was that a release of one joint tortfeasor released all other parties jointly liable, regardless of the intent of the parties." 401 U.S. at 343, 91 S. Ct. at 808, 28 L. Ed. 2d at 95. The Supreme Court rejected this rule in Aro finding it to have "been repudiated by statute or decision in many if not most states . . . and by the overwhelming weight of scholarly authority". 377 U.S. at 501, 84 S. Ct. at 1540, 12 L. Ed. 2d at 477.
The two more modern approaches are that a release normally extinguishes the underlying cause of action unless the plaintiff expressly reserves his rights against others
or the viewpoint expressed by Judge Snyder in the Leach case that the intention of the parties governs without any presumptions as to the effect of a release.
401 U.S. at 343, 91 S. Ct. at 808, 28 L. Ed. 2d at 95. The Supreme Court applied the intention of the parties rule in Zenith, 401 U.S. at 345, 91 S. Ct. at 809, 28 L. Ed. 2d at 96 to civil antitrust cases. See also the opinion of this court in Baughman v. Cooper Jarrett, 391 F. Supp. 671 (W.D.Pa.1975).
The court has determined, as did Judge Snyder in Leach, that the more modern approach to determining the effect of releases, reflected in Aro and in Zenith, should be applied to admiralty cases. The court notes that injured seamen such as the plaintiff often suffer from a lack of education and may be unaware of their legal rights. Thus, there is even more reason to construe admiralty releases to protect the plaintiffs' rights than there is in the fields of antitrust and patent infringement, where the parties are more likely to possess equal bargaining power. The court also notes that while there are no Third Circuit cases on point, the Fifth Circuit has adhered to the intention of the parties' rule in construing admiralty releases in Billiot v. Sewart Seacraft, Inc., 382 F.2d 662 (5th Cir. 1967).
(2) Set Off of Prior Settlement.
A corollary to the two modern viewpoints about the effect of releases, discussed in Zenith, supra is that the plaintiff cannot receive a double recovery for the same injuries even if he is permitted to maintain more than one lawsuit. In the Aro case, the Supreme Court stated that:
"Payments made by one tortfeasor on account of a harm for which he and another are each liable, diminish the amount of the claim against the other whether or not it was so agreed at the time of payment and whether the payment was made before or after judgment . . . ." Restatement of Torts, supra, § 885(3).
"It has been said that 'all courts are agreed' upon such a rule." 377 U.S. at 503, 84 S. Ct. at 1541, 12 L. Ed. 2d at 478.
In Zenith, the Supreme Court stated the rule to be that:
"It is settled that, entirely apart from any release, a plaintiff who has recovered any item of damage from one coconspirator may not again recover the same item from another conspirator; the law, that is, does not permit a plaintiff to recover double payment." 401 U.S. at 348, 91 S. Ct. at 811, 28 L. Ed. 2d at 97.
The release, see underlined portion in Appendix A, discusses the matter of a set off in the suit against Crain Brothers but the intent of the parties as to its amount is ambiguous. The court interprets this portion of the release to mean that the parties intended for there to be an offset and listed two possible tests of the amount -- either the amount of consideration, $85,000, or P&LE's pro rata share of any recovery against Crain Brothers under a joint tortfeasor theory.
In Parts 4 and 5 of this memorandum, infra, the court determines that P&LE is liable to Crain Brothers for 3/4 of the total verdict. The two standards outlined in the release thus lead to different results under the facts of this case. The release contains no provision outlining how to deal with such conflict -- such as to apply the greater amount. But in a personal injury case under admiralty law such as this and especially considering that the plaintiff is illiterate and probably did not possess equal bargaining power with the P&LE, the court will construe this ambiguous provision in favor of the plaintiff. Several principles of contract construction may apply to this release: contracts should be construed against the drafting party, In re F. H. McGraw & Company, 473 F.2d 465 (3d Cir. 1973), cert. den. 414 U.S. 1022, 94 S. Ct. 443, 38 L. Ed. 2d 312 (1973), existing law is deemed to be part of a contract absent a contrary manifestation of intent. (The existing law under Aro and Zenith would provide for a set off of the first settlement only.), Rehart v. Clark, 448 F.2d 170 (9th Cir. 1971), and the courts have always reflected a high degree of solicitude for the rights of injured seamen, e.g. Calmar S. S. Corp. v. Taylor, 303 U.S. 525, 58 S. Ct. 651, 82 L. Ed. 993 (1938). Harden v. Gordon, Fed. Cas. No. 6047 (C.C.) (containing a classic passage by Mr. Justice Story about the duty of courts to protect seamen.) The court thus rules that the full amount of the $85,000 settlement -- but not the total pro rata share of P&LE of the recovery in this case -- must be set off against the plaintiff's recovery in this case. This approach is in line with Zenith and Aro in prohibiting a double recovery and also reflects the fairest reading of the intent of the parties in executing the release. This result also reflects the court's sense of justice and fair play. If no set off were permitted in this case, the plaintiff would be receiving $85,000 in excess of what a jury determined to be the fair value of his damages. And to permit such a double recovery would be to approve a procedure whereby plaintiffs could attempt to escalate their damages by recovering the same items two times from two different parties. Such recoveries would constitute windfalls to injured seamen at the expense of shipowners and stevedores. On the other hand, to allow a set off of greater than $85,000 would give the plaintiff a total recovery less than the amount the jury determined to be the fair value of his injuries and would not reflect the fairest reading of the terms of the release.
The court has examined the case of Pope & Talbot v. Hawn, 346 U.S. 406, 74 S. Ct. 202, 98 L. Ed. 143 (1953), cited by the plaintiff as allowing double recovery in this case. In Hawn, the plaintiff had received payments under the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. § 901 et seq. from his employer, an independent contractor, for injuries received while repairing grain-loading equipment. In an action against the shipowner for unseaworthiness, the court, in an opinion by Justice Black, refused to permit a set off for prior compensation payments received from the independent contractor. However, this holding was premised on Section 33 of the L&HWCA which has "specific provisions to permit an employer to recoup his compensation payments out of any recovery from a third person negligently causing such injuries."
346 U.S. at 412, 74 S. Ct. at 206, 98 L. Ed. at 152. The court also did not wish to frustrate the Act's purpose: "to protect employers who are subject to absolute liability by the Act".
The Hawn case thus rests on the unique provisions of the L&HWCA. Civil Action 74-50 was brought under the Jones Act and other than some nominal payments before the suit was commenced,
the plaintiff has not sought nor received any compensation payments ...