The opinion of the court was delivered by: COHILL
Presently before us is Plaintiff's Motion to Dismiss Defendants' counterclaim brought in Admiralty for the return of maintenance and cure paid by Defendants under a mistaken belief that the Plaintiff was entitled to it. This action arises from an accident which occurred on November 4, 1981. Plaintiff, while moving railroad cars loaded with coal and dumping that coal from the cars into bins to be placed onto river barges owned by the Defendants, received a serious and disabling leg injury. As a result of that accident, Defendants paid Plaintiff maintenance and cure at the rate of $180 per week from November 18, 1981 through November 15, 1982. These payments totalled $9,360. From November 4, 1981 through March 31, 1983, Plaintiff also received Workmen's Compensation benefits from Defendants' insurance carrier at the rate of $131 per week. Those benefits totalled $9,619.13.
In an order dated November 19, 1984, we granted Defendants Motion for Summary Judgment, finding that, as a matter of law, Plaintiff was not a seaman, and was therefore not entitled to either maintenance and cure or damages under the Jones Act. After we granted summary judgment on the complaint, Defendants filed a request for entry of default based on Plaintiff's failure to plead or otherwise respond to the Defendants' counterclaim. Plaintiff immediately responded with a motion to dismiss the counterclaim for failure to state a claim upon which relief can be granted. Having denied Defendants' request for entry of default, we now address Plaintiff's motion to dismiss.
The Defendants' counterclaim is based on the theory that the Plaintiff, if he is allowed to keep the money paid, will be unjustly enriched because he was not entitled to the payments in the first place. In the alternative, Defendants maintain that the money paid under maintenance and cure constitutes a double recovery, since Plaintiff also received Workmen's Compensation. Both arguments rely on a theory of unjust enrichment and appeal to the court's equitable powers for relief in the form of restitution.
Plaintiff argues that Defendants paid Plaintiff maintenance and cure under a mistake of law and not of fact, thus no restitution is required. Plaintiff points out that the Defendants knew that the Plaintiff's employment did not involve a permanent connection with this particular vessel and did not require Plaintiff to be aboard the vessel for navigational purposes. Plaintiff also argues that repayment of the maintenance and cure would be contrary to public policy and the purpose behind imposing the duty on shipowners to make those payments. Finally, Plaintiff denies having recovered twice for the same injury in that maintenance and cure and Workmen's Compensation are distinct remedies serving different beneficial functions.
In evaluating a motion to dismiss a counterclaim, the allegations of the counterclaim and all reasonable inferences drawn therefrom must be accepted as true and viewed in the light most favorable to the nonmoving party. Miree v. DeKalb County, 433 U.S. 25, 27 n.2, 97 S. Ct. 2490, 2492 n.2, 53 L. Ed. 2d 557 (1977); Kugler v. Helfant, 421 U.S. 117, 125 n.5, 95 S. Ct. 1524, 1531 n.5, 44 L. Ed. 2d 15 (1975); Empire Abrasive Equipment Corp. v. HH Watson Inc., 567 F.2d 554, 557 (3d Cir. 1977); Amanto v. Witlin, 544 F. Supp. 140, 141 (E.D. Pa. 1982). A counterclaim should not be dismissed unless it appears that the nonmoving party could prove no set of facts that would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957).
As far as we can tell, this case is one of first impression with regard to the return of maintenance and cure paid under a mistaken belief that Plaintiff was a seaman. Although no statutory authority governs this situation, Defendants argue that general principles of restitution and unjust enrichment should be applied to resolve the counterclaim in their favor.
Generally, a person who has been unjustly enriched at the expense of another is required to make restitution to the other. Shipping Co. of India v. Sun Oil, 569 F. Supp. 1248 (E.D. Pa. 1983). Courts have carved out certain specific exceptions to this rule. For instance, it has long been held that money voluntarily paid on a mistake of law cannot be recovered on the ground that the party supposed he was bound in law to pay it when in truth he was not. Gulf Refining Co. v. City of Philadelphia, 31 F. Supp. 587, aff'd, 110 F.2d 661 (3d Cir. 1940); PLM, Inc. v. Consolidated Rail Corp., 490 F. Supp. 194, 196 (E.D. Pa. 1980); AAA Trucking Corp. v. Teamsters Pension Trust Fund, 480 F. Supp. 579, 580-81 (E.D. Pa. 1979) vacated, 633 F.2d 209 (3d Cir. 1980). A mistake of law is a mistake "as to the legal consequences of an assumed state of facts." Acme Markets v. Valley View Shopping Center, 342 Pa. Super. 567, 493 A.2d 736, 737 (1985) (citing Betta v. Smith, 368 Pa. 33, 36, 81 A.2d 538, 539 (1951). Where, under a mistake of law, one voluntarily and without duress or fraud pays money to another with full knowledge of the facts, the money paid cannot be recovered. Acme 493 A.2d at 737 (citing Ochiuto v. Prudential Ins. Co. of America, 356 Pa. 382, 384, 52 A.2d 228, 230 (1947)).
Defendants argue that Vella v. Ford Motor Company, 421 U.S. 1, 95 S. Ct. 1381, 43 L. Ed. 2d 682 (1975) leaves open the possibility of restitution of mistakenly paid maintenance and cure. In Vella, a seaman received a permanent injury which was not diagnosed as permanent until sometime later. Maintenance and cure is not to be paid once an injury is declared permanent. Farrell v. United States, 336 U.S. 511, 517, 69 S. Ct. 707, 93 L. Ed. 850 (1949). The question at issue in Vella was whether payment of maintenance and cure should end when the injury became permanent, or when it was diagnosed as permanent. The Court reasoned that denial of maintenance and cure when the seaman's injury, though in fact permanent immediately after the accident, is not medically diagnosed as permanent until long after its occurrence, would frustrate the purpose of imposing the duty as well as the ease of administering it. 421 U.S. at 4. Employers would be encouraged to withhold payments until the illness or injury had been thoroughly examined. Also, if forced to reimburse amounts improperly paid, seamen would be discouraged from accepting any payments until certain that the injury was not permanent. Either way, the Court concluded that the object of the payments, protection of the seamen's interests, would be impaired. Id.
Defendants' arguments are both factually and philosophically inconsistent with the situation occurring in Vella. Here, Defendants knew what the Plaintiff's job entailed and made an erroneous conclusion as to whether those job requirements made him a seaman entitled to maintenance and cure, or a longshoreman whose sole remedy lay in the Longshore and Harbor Workers Compensation Act ("LHWCA"). 33 U.S.C. §§ 901-950 (Supp. II 1972). Unlike the medical information required to determine the permanence of an injury, the Defendants here were not required to consider factors unknown to them at the time of initial payment.
In its analysis, the Court in Vella repeatedly asserts that the purpose of maintenance and cure is to protect the seaman who is a ward of the Admiralty. Even under the facts of Vella, which we believe are more sympathetic toward the plight of the employer than are the facts of the present case, we believe that the Court indicates an unwillingness to impose the burden of restitution upon the employee. Instead, Vella seems to favor burdening the shipowner with the obligation of determining which of his employees are seamen and the risk of making improper payments of maintenance and cure when he has not done so.
Defendants next contend that Plaintiff has recovered twice for his medical expenses, once through the payment of maintenance and cure, and again through the payment of Workmen's Compensation by the Defendants' insurance company, thus arguing that Plaintiff has received a "double recovery."
In order to address this argument, we must examine the origin and purpose of maintenance and cure, a remedy unique to admiralty. The ancient duty of a vessel and her owner to provide maintenance and cure for a seaman who becomes ill or is injured while in the service of the vessel arises from the contract of employment and not from any negligence on the part of the owner. Calmar S.S. Corp. v. Taylor, 303 U.S. 525, 527, 58 S. Ct. 651, 82 L. Ed. 993, 996 (1938). It is completely separate from any liability which may be imposed under the Jones Act for negligence or under general maritime law for unseaworthiness of the vessel. Likewise, it has no relationship to ...