filed: March 30, 1990; As Amended April 19, 1990.
On Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civil No. 85-6623.
Sloviter and Becker, Circuit Judges, and Lifland, District Judges.*fn*
Maintenance is the payment by a shipowner to a seaman for the seaman's food and lodging expenses incurred while he is ashore as a result of illness or accident. Both parties agree that the issue before us on this appeal is of substantial importance to the United States maritime industry: whether a seaman is bound by the rate of maintenance fixed in a collective bargaining agreement between the seaman's union and a shipowner. If he*fn1 is not bound, we must also decide whether the prorated expense of his permanent lodging may be included in the rate of maintenance.
The Ninth Circuit, in a divided opinion, held that the collectively bargained rate of $8.00 a day is binding on the seaman notwithstanding the district court's finding that the rate is inadequate to obtain food and lodging. Gardiner v. Sea-Land Service, Inc., 786 F.2d 943 (9th Cir.), cert. denied, 479 U.S. 924, 93 L. Ed. 2d 303, 107 S. Ct. 331 (1986). Two other circuits recently followed that approach. See Macedo v. F/V Paul & Michelle, 868 F.2d 519 (1st Cir. 1989); Al-Zawkari v. American Steamship Co., 871 F.2d 585 (6th Cir. 1989). The district court in this case held that the contract rate is not binding on the seaman and awarded a maintenance rate based on expenses actually incurred. Because we agree with the district court that the seaman may challenge the bargained rate, we will depart from the position of the First, Sixth and Ninth Circuits. We also agree with the district court that the seaman is not precluded from recovering the cost of his lodging merely because he also incurred that expense when he was at sea. However, because we find that the district court included in its calculation of the amount of maintenance costs not properly encompassed by the seaman's right of maintenance and costs not supported by the record, we will remand for recalculation of the maintenance award to which plaintiff is entitled.
Facts and Procedural History
Plaintiff George Barnes, a member of the Seafarers International Union (SIU or Union), was injured on November 5, 1985 while working aboard the M/V Adonis in Puerto Rico. He sued defendants Andover Shipping Company and Apex Marine Corporation (for whom Andover Co. L.P. has since been substituted in place of both original defendants) pursuant to the Jones Act, 46 U.S.C. § 688(a) (1982), and general maritime law alleging that his injuries were caused by defendants' negligence and the unseaworthiness of the vessel and requested compensatory and punitive damages. He also requested maintenance and cure in the amount of $35.00 a day, an amount in excess of the $8.00 a day provided for by the collective bargaining agreement in effect between the Union and Andover. The parties settled all claims except Barnes' claim for maintenance from November 5, 1985 until July 4, 1986.
At an expedited hearing before the district court on February 5, 1986, both parties presented evidence on Barnes' living expenses while on and off the ship. The court ordered maintenance at $21.53 a day, which, following a motion for reconsideration, was later reduced to $20.88 to exclude Barnes' expenses for union dues. The district court fixed this amount based on plaintiff's testimony as to the amount of his monthly expenses for gas, electricity, food, homeowner's insurance, toiletries, gas and oil for his automobile, and automobile insurance. After Andover filed a notice of appeal, counsel agreed that the record was inadequate to permit review and jointly moved to remand for supplementation of the record.
Upon remand, the parties submitted evidence to the district court concerning Barnes' living expenses, the bargaining leading up to the SIU collective bargaining agreement, the effect of inflation on the bargained rate of $8, and other information regarding union benefits and procedures. The evidence of Barnes' living expenses provided by Barnes' testimony and the deposition of his sister, Mary Molander, was that Barnes and his sister had a longstanding agreement whereby together they maintained a home in Philadelphia, Pennsylvania. Molander owned the house, which was completely paid for. Barnes usually paid one-half of the utilities and other expenses regardless whether he was ashore or at sea. Molander testified that she used her own savings to pay for plaintiff's share of household expenses after he was injured and before the settlement of his personal injury claim.
The district court issued a second memorandum and order reviewing the new evidence and applicable law. The court held that the $8 contractual rate was unenforceable because maintenance is a right which is inseparable from the seaman's service. It rejected the defendant's argument that the National Labor Relations Act preempts the seaman's right to claim maintenance above the contractual rate. It also rejected the argument adopted by the Ninth Circuit in Gardiner, 786 F.2d at 948-49, that the broad policies underlying our national labor laws require the bargained maintenance rate to be enforced. Finally, the court held that even if the rate of maintenance were a proper subject of bargaining, there was no evidence that the rate of maintenance had been an actual subject of bargaining between the union and the shipowners. The court then stated that it had reviewed the additional evidence concerning plaintiff's expenses, concluded that the amount previously determined was appropriate, and ordered defendant to pay Barnes maintenance in the amount of $20.88 per day. Andover filed a timely appeal.
Maintenance is the living allowance for a seaman while he is ashore recovering from injury or illness. See Vaughan v. Atkinson, 369 U.S. 527, 531, 8 L. Ed. 2d 88, 82 S. Ct. 997 (1962). "Cure" is payment of medical expenses incurred in treating the seaman's injury or illness. See Calmar S.S. Corp. v. Taylor, 303 U.S. 525, 528, 82 L. Ed. 993, 58 S. Ct. 651 (1938). The duty to provide maintenance and cure was first introduced into American admiralty law by Justice Story, decided on circuit, in Harden v. Gordon, 11 F.Cas. 480, 482-83 (C.C.D.Me. 1823) (No. 6,047), and was first recognized and defined by the Supreme Court in The Osceola, 189 U.S. 158, 175, 47 L. Ed. 760, 23 S. Ct. 483 (1903). The duty was derived from medieval maritime codes. Id. at 169 (quoting and citing the Rules of Oleron, the Laws of Wisbuy, and the Laws of the Hanse Towns); Aguilar v. Standard Oil Co., 318 U.S. 724, 730 & n.6, 87 L. Ed. 1107, 63 S. Ct. 930 (1943).
The reason for imposing the duty on American shipowners is found in the oft-quoted language of Justice Story:
Seamen are by the peculiarity of their lives liable to sudden sickness from change of climate, exposure to perils, and exhausting labour. They are generally poor and friendless, and acquire habits of gross indulgence, carelessness, and improvidence. If some provision be not made for them in sickness at the expense of the ship, they must often in foreign ports suffer the accumulated evils of disease, and poverty, and sometimes perish from the want of suitable nourishment. . . . If these expenses are a charge upon the ship, the interest of the owner will be immediately connected with that of the seamen. The master will watch over their health with vigilance and fidelity. . . . Even the merchant himself derives an ultimate benefit from what may seem at first an onerous charge. It encourages seamen to engage in perilous voyages with more promptitude, and at lower wages. It diminishes the temptation to plunderage upon the approach of sickness; and urges the seamen to encounter hazards in the ship's service, from which they might otherwise be disposed to withdraw.
Harden, 11 F.Cas. at 483.
Viewing seamen as wards of the admiralty, the Court has emphasized that the right to maintenance and cure must be construed liberally and has consistently expanded the scope of the right. See Vaughan, 369 U.S. at 531-34; Warren v. United States, 340 U.S. 523, 529-30, 95 L. Ed. 503, 71 S. Ct. 432 (1951); Aguilar, 318 U.S. at 729, 735-36; Calmar, 303 U.S. at 529-30. Thus, today a shipowner is obliged to pay maintenance and cure regardless of any fault on its part; only wilful misconduct on the part of the seaman will deprive him of its protection. Aguilar, 318 U.S. at 730-31.
The employer's responsibility for maintenance and cure extends beyond injuries sustained on board ship or during working hours to any injuries incurred in any place while the seaman is subject to the call of duty. Id. at 732; see also Warren, 340 U.S. at 529-30 (seaman on shore leave injured in Italian dance hall entitled to maintenance and cure). The shipowner is obliged to pay maintenance and cure until the seaman has reached the point of maximum cure, that is until the seaman is cured or his condition is diagnosed as permanent and incurable. See Vella v. Ford Motor Co., 421 U.S. 1, 5, 43 L. Ed. 2d 682, 95 S. Ct. 1381 (1975); Vaughan, 369 U.S. at 531; Neville v. American Barge Line Co., 276 F.2d 117, 118-19 (3d Cir. 1960).
The traditional maritime right to maintenance and cure was recognized in the Shipowners' Liability Convention, 54 Stat. 1693, which was ratified by the Senate and made effective by proclamation of the President on October 29, 1939. See Farrell v. United States, 336 U.S. 511, 517, 93 L. Ed. 850, 69 S. Ct. 707 (1949). Article 2 of the Convention places liability on shipowners for sickness and injury occurring during employment. Id. at 1695. Article 3 defines maintenance as board and lodging. Id. Article 4 of the Convention provides that "[the] shipowner shall be liable to defray the expense of medical care and maintenance until the sick or injured person has been cured" or has reached the point of maximum cure. Id. at 1696. The Convention has been considered by the Supreme Court as reinforcing the traditional maritime right of maintenance. See Vella, 421 U.S. at 5-6; Farrell, 336 U.S. at 517-19; O'Donnell v. Great Lakes Dredge & Dock Co., 318 U.S. 36, 42, 87 L. Ed. 596, 63 S. Ct. 488 (1943).
Historically, maintenance and cure and unearned wages*fn2 during the recovery or until the end of the contract were the only remedies available to injured seamen. Today they are only part of an array of remedies to which they are entitled.*fn3 At the beginning of this century the Court granted seamen a damage remedy if their injuries resulted from the unseaworthiness of their ship or a defect in her equipment. See The Osceola, 189 U.S. at 175; Cortes v. Baltimore Insular Line, 287 U.S. 367, 371, 77 L. Ed. 368, 53 S. Ct. 173 (1932). The Jones Act, enacted in 1920, provides that a seaman who is injured through the negligence of his employer or a fellow employee is entitled to damages. De Zon v. American President Lines, 318 U.S. 660-65, 87 L. Ed. 1065, 63 S. Ct. 814 (1943). The Jones Act also has been held to provide an action for a seaman against the shipowner for negligence in failing to provide maintenance and cure. Cortes, 287 U.S. at 371-72, 375-76; De Zon, 318 U.S. at 665-68 (1943).
There are significant differences between maintenance and the more recent remedies. As the Court has pointed out, "maintenance and cure is more certain if more limited in its benefits." Farrell, 336 U.S. at 519. Although maintenance does not entitle a seaman to a pension or a lump-sum payment to compensate for disability or lost earning capacity, it is available in the absence of any showing of negligence or unseaworthiness, it is not reduced by a seaman's negligence, and it must be provided at the onset of the illness or injury and not only after a judicial finding of liability.
Maintenance is intended to provide for the cost of food and lodging comparable in quality to that the seaman is entitled to at sea. Calmar, 303 U.S. at 528; Cox v. Dravo Corp., 517 F.2d 620, 623 (3d Cir.) (in banc), cert. denied, 423 U.S. 1020, 46 L. Ed. 2d 392, 96 S. Ct. 457 (1975). Since the 1940's most courts have generally awarded $8 a day as maintenance to seamen. 1B Benedict on Admiralty § 43 at 4-9, § 51 at 4-74 (7th ed. 1989); G. Gilmore & C. Black, The Law of Admiralty 307 (2d ed. 1975). Today, most deep water seamen are unionized and it appears that most collective bargaining agreements incorporate the $8 rate. See 1B Benedict on Admiralty § 51 at 4-74 (7th ed. 1989); see generally Note, Maintenance & Cure: Contract Right or Legal Obligation?, 62 Tul.L.Rev. 625 (1988).
However, in the past decade some courts which have been obliged to determine the appropriate rate of maintenance for non-unionized seamen have recognized that the $8 rate is generally inadequate to provide food and lodging, and have awarded higher rates to reflect the actual reasonable costs the seamen incurred. See, e.g., Morel v. Sabine Towing & Transp. Co., 669 F.2d 345, 347-48 (5th Cir. 1982) ($20 a day for maintenance in Port Arthur, Texas); Incandela v. American Dredging Co., 659 F.2d 11, 14 (2d Cir. 1981) ($26.80 a day for maintenance in New York City); Caulfield v. AC & D Marine, Inc., 633 F.2d 1129, 1132-33 (5th Cir. 1981) ($15 a day for maintenance in New Orleans). As noted above, in those cases where the courts have set the rate of maintenance for unionized seamen, they have generally limited the award to the amount specified in the union contract regardless of actual reasonable ...