Overseas African Construction Corp. v. McMullen
Overseas African Construction Corp. v. McMullen
Opinion of the Court
The principal appeal is by St. Paul Mercury Insurance Co. (St. Paul) on behalf of itself and Overseas African
St. Paul filed its action to set aside the award on July 21, 1972, pursuant to 33 U.S.C. § 921. In a memorandum opinion and order dated November 21, 1973, on cross motions for summary judgment, the district court dismissed St. Paul’s challenge to the award and affirmed the award in claimant’s favor. The court also imposed a statutory penalty on St. Paul under 33 U.S.C. § 914(f).
The claimant, was hired in New York by Overseas African and was assigned to a project at Chisimaio, Somalian Republic, Africa, during the period from May, 1968, to December, 1968, as project manager and chief accountant.
The claim of St. Paul is that the deputy commissioner and the court below were without jurisdiction to enter an award and judgment respectively under the Defense Base Act. The claim is evidentially based solely on a letter from AID bearing a date of February 22, 1972, which is set forth in the margin.
the provisions of the Longshoremen’s and Harbor Workers’ Compensation Act . . . shall apply in respect to the injury or death of any employee engaged in any employment . (5) under a contract approved and financed by the United States or any executive department ... or agency thereof . . . where such contract is to be performed outside the continental United States, under the Mutual Security Act of 1954, as amended (other than title II of chapter II thereof unless the Secretary of Labor, upon the recommendation of the head of any department or other agency of the United States, determines a contract financed under a successor provision of any successor Act should be covered by this section)
(Emphasis added.)
St. Paul’s argument is, then, that since title II of chapter II of the Mutual Security Act of 1954 established a Development Loan Fund as an agency of the United States and body corporate authorized to make loans to promote the economic development of underdeveloped friendly countries, and since the letter from AID says that the work performed
Apparently this highly technical argument is a bit of an afterthought, for both the employer and St. Paul thought that the Chisimaio project was a Defense Base Act project and respectively sought and supplied insurance coverage in relation to it. The contract of employment between Overseas African as employer and Mr. McMullen, the employee, provided that the employer would
procure and pay the premiums for such compensation insurance as will accord to Employee . . . the statutory benefits for death or injury to which the Employee may be entitled under the applicable Federal law of the United States including but not limited to the Defense Base Act and War Hazards Compensation Act. Said workmen’s compensation insurance shall also include coverage of Employee for illness due to endemic diseases of Somalia. . . .
St. Paul’s policy originally had provided in Section 2, Coverage A,
The company agrees to pay voluntarily on behalf of the insured, to the employees defined in Section 1 of this endorsement, the compensation, medical and other benefits specified in the Workmen’s Compensation Law and
Occupational Disease Law of the state designated in Item 3 of the declarations [New York] in the same manner as if such employees were covered under the provisions of said law or laws.
By endorsement the policy was amended to read “Policy includes employees working in Chisimaio, Somalia (estimated at eleven)” and another endorsement provided rather cryptically, “It is understood and agreed that Public Law 208 benefits apply as respects the A.I.D. Projects only.”
Certainly a prima facie showing of federal jurisdiction in this case is made out by the contract of insurance itself, especially in light of 0the apparently successful argument of St. Paul— after claimant had originally proceeded in the New York state courts to attempt to establish compensability under the relevant state statutes — that a federal forum was the appropriate one for resolution of the dispute. A strong argument can be made that St. Paul should be estopped from challenging federal jurisdiction over the dispute, or from raising the point that, as a factual matter, the contractual relationships involved a specific exception to jurisdiction over a dispute that is otherwise clearly a federal matter. Without rendering our decision on this basis, we would nevertheless remark that St. Paul’s actions during the course of this dispute can and should be weighed in connection with
So doing, we agree with the deputy commissioner and with the court below that the AID letter of February 22, 1972, is insufficient to overcome the statutory presumption of jurisdiction. The rule, of course, is that so long as any reasonable inference from the facts supports jurisdiction under the statutory presumption that jurisdiction may be found. Cardillo v. Liberty Mutual Insurance Co., 330 U.S. 469, 474, 67 S.Ct. 801, 91 L.Ed. 1028 (1947); Michigan Mutual-Liability Co. v. Arrien, 344 F.2d 640, 645-646 (2d Cir.), cert. denied, 382 U.S. 835, 86 S.Ct. 80, 15 L.Ed.2d 78 (1965). But see Employers Mutual Liability Inssurance Co. v. Arrien, 244 F.Supp. 110, 113 (N.D.N.Y. 1965) (distinction between presumption of coverage and presumption of jurisdiction). The AID letter does not indicate the relationship between the parenthetical exclusion in § 1(a)(5) of the Defense Base Act, 42 U.S.C. § 1651(a)(5), and the assertion that Overseas African’s contract “was totally financed on a development loan basis.” St. Paul did nothing to prove that relationship before the deputy commissioner, before the court belqw, or before us. For all that appears before us there are other foreign assistance act loans, and there are other forms of development loans than those made from the Development Loan Fund.
Thus it becomes unnecessary for us to pass upon the deputy commissioner’s assertion that this contract was covered by 42 U.S.C. § 1651(a) (4),
We pass then to the question of attorneys’ fees. To recapitulate, the deputy commissioner approved a fee of $2,500 for the services of the claimant’s attorney and directed that this be paid out of the total award. The district court fixed the value of the claimant’s estate’s attorneys’ services at $1,800 in addition thereto, and directed that this also be paid by the executor out of any funds received by him. These awards were clearly authorized by 33 U.S.C. § 928 as it existed prior to its amendment. On cross appeal here the deputy commissioner and the claimant’s estate raise two arguments concerning who should pay these fees. The first argument is that the district court erred in not finding that all counsel fees in that court should be chargeable to St. Paul by virtue of 33 U.S.C. § 926, which allows for the imposition of all costs upon a party that institutes or continues proceedings relative to workmen’s compensation “without reasonable ground. . ” The second argument is that at least those legal expenses incurred by claimant’s estate after November 26, 1972, are recoverable against St. Paul irrespective of whether “reasonable grounds” existed for St. Paul’s resistance to the claim under the provisions of § 928 as amended.
Legal fees in this court, which we set at $2,000.00, we find to be governed by the provisions of 33 U.S.C. § 928(a) & (c) as amended. Under § 928(a), a claimant, whose claim is resisted by a carrier, who successfully prosecutes that claim has an absolute right to recover his legal expenses incurred in that prosecution. The only serious dispute involving § 928(a) is whether, as a statutory matter, Congress intended that section to apply to cases pending in any forum on November 26, 1972 (the effective date of the amendments), and, if so, whether there be any constitutional impediment to such an application. These questions need not detain us long. In Virginia Hotel Co. v. Mills, BRB No. 133-73 (Ben Rev. Bd. Apr. 2, 1974), the Benefits Review Board of the Department of Labor, which, under 33.U.S.C. § 921(b)(3), replaces the district court for purposes of appealing a compensation order, held that the absence of any legislative history to the contrary indicated congressional intent that the amendments — here involving procedural and remedial aspects of workmen’s compensation disputes — should be applied to pending proceedings. There being no savings clause in the amendments, we fully concur with the Mills decision on this point. As was said by the Supreme Court in Sampeyreac v. United States, 32 U.S. (7 Pet.) 222, 238, 8 L.Ed. 665 (1833), “Almost every law, providing a new remedy, affects and operates upon causes of action existing at the time the law is passed.” See Ahmed’s Case, 278 Mass. 180, 179 N.E. 684 (1932). Cf. Bradley v. Richmond School Board, 416 U.S. 696, 94 S.Ct. 2006, 40 L.Ed.2d 476 (1974). See generally 3 A. Larson, The Law of Workmen’s Compensation §§ 83.12, 83.17 (1973). As for any constitutional objections to such retrospective application of § 928(a) as is involved here, objections not raised directly by St. Paul in its briefs, we agree with the Mills decision to the effect that the date the right of action accrued has no constitutional significance. As of November 26, 1972, St. Paul was on notice that § 928(a) as amended might be applied to its case
For the reasons stated herein, the judgment of the district court to the extent that it affirmed the award of the deputy commissioner is affirmed; so much of the district court’s judgment as denied claimant’s entitlement to legal fees in that court is reversed and the cause remanded to the district court for entry of an order directing St. Paul to make good those expenses. Legal fees assessed in this court are to be paid in accordance with this opinion.
. The award was for $11,250.00 on the basis of $70.00 per week from January 1, 1969, to January 30, 1972, plus $1,245.50 for documented medical expenses incurred during this period. A fee of $2,500.00 for claimant’s attorneys was fixed by the deputy commissioner to be paid out of the compensation awarded.
. This Act was adopted to extend coverage to employees working on defense bases including originally particularly those acquired from Great Britain on a lend-lease basis. See Republic Aviation Corp. v. Lowe, 164 F.2d 18 (2d Cir. 1947) (Chase, J.), cert. denied, 333 U.S. 845, 68 S.Ct. 663, 92 L.Ed. 1128 (1948). As such it was a “remedial act” to be “interpreted to accomplish so far as is possible the purposes for which it was intended.” Id. at 20.
. Under § 14(f) of the LHWCA, if payment of an award is not timely made (within 10 days) and no stay is sought or granted, a 20 per cent penalty “shall be imposed” by the district court. 33 U.S.C. § 914(f). Thus, the total amount of the award before this court is $14,994.60.
. Longshoremen’s and Harbor Workers’ Compensation Act Amendments of 1972, Pub.L. No. 92-576, § 13, 86 Stat. 1251, 1259, 1265.
. Overseas African was a wholly owned subsidiary of Reynolds Construction Co., which was the original overseas contractor for this project and to which the insurance policy originally underwritten by St. Paul ran as insured. The contract between the Somalian Republic and Reynolds was assigned by the latter to Overseas African and, by endorsement to the St. Paul-Reynolds insurance policy, it was agreed that the name of the insured was amended to include the interests of Overseas African.
. On August 21, 1969, claimant settled a claim under a separate policy, # GR 1018, with AFIA-St. Paul Mercury Insurance Co., Overseas African and/or Reynolds, for $1,800.00. This policy involved compensation under the rubric of “Non-occupational Sickness Weekly Indemnity Benefits” and was found by the deputy commissioner to have no bearing on claimant’s rights under the Defense Base Act.
. With $2,500.00 fixed as attorneys’ fees by the deputy commissioner and $1,800.00 by the district court, as the case comes to us $4,300.-00 is chargeable against the overall recovery of $14,994.60 exclusive of any fees which might be awarded in this appeal.
. The pertinent portion of the letter is as follows:
The following information is supplied in response to your inquiry to Mr. Barry Wallace concerning Overseas African Construction Corporation’s work on the Chisimaio Port project. The work performed by Overseas African was totally financed on a development loan basis. The applicable loan is designated as Chisimaio Port and Municipal Facilities Loan No. 649-H-002.
. In any proceeding for the enforcement of a claim for compensation under the LHWCA “it shall be presumed, in the absence of substantial evidence to the contrary — (a) that the claim comes within the provisions of this chapter.” 33 U.S.C. § 920.
. The original statute establishing the Development Loan Fund as a corporate agency was repealed by the Foreign Assistance Act of 1961, Pub.L. No. 87-195, pt. Ill, ch. 3, § 642(a)(2), 75 Stat. 460. That act established a new “Development Loan Fund” to be used by the President to make loans pursuant to the authority contained in the Act and the new fund provisions are set forth in 22 U.S.O. §§ 2161-2169 inclusive. Technically speaking, there is no longer any title II, chapter II, exception of the Mutual Security Act of 1954 as amended, 42 U.S.C. § 1651(a) (5), but the Development Loan Fund referred to in 22 U.S.O. §§ 2161-2169 must be read as continuing the exception to 42 U.S.O. § 1651(a) (5), since § 642(b) of the Foreign Assistance Act of 1961, 75 Stat. 460, provided that
References in law to the Acts, or provisions of such Acts, repealed by subsection (a) of this section shall hereafter be deemed to be references to this Act or appropriate provisions of this Act . . .,
and since old title II, chapter II, was replaced by the similar provisions of pt. I, ch. 2, title I of the 1961 Act (comprising §§ 201-205), 75 Stat. 426-427, now as amended, 22 U.S.C. §§ 2161 et seq.
. We say “cryptically,” because it is now claimed by the insurer that the case falls within an exception to the Public Law 208 benefits because it was an AID “development loan” project.
. Since tlie contract appears to have been executed solely by the Republic of Somalia and not by the United States as a party, it would not appear to fall within the provisions of 42 U.S.C. § 1651(a)(4). However, it is on a federal form and apparently a federal “contracting officer” approved the assignment from Reynolds Construction Co. to Overseas African.
. Section 928(a), as amended, reads as follows :
If the employer or carrier declines to pay any compensation on or before the thirtieth day after receiving written notice of a claim for compensation having been filed from the deputy commissioner, on the ground that there is no liability for compensation within the provisions of this chapter, and the person seeking benefits shall thereafter have utilized the services of an attorney at law in the successful prosecution of his claim, there shall be awarded, in addition to the award of compensation, in a compensation order, a reasonable attorney’s fee against the employer or carrier in an amount approved by the deputy commissioner, Board, . or court, as the case may be, which shall be*1297 paid directly by the employer or carrier to the attorney for the claimant in a lump sum after the compensation order becomes final.
. Thus, if our judgment on the § 926 issue with respect to legal fees in the district court should be found erroneous by the Supreme Court, claimant’s estate would still be entitled to recovery of any legal expenses incurred in the district court after November 26, 1972, should our view of § 928(a) be sustained. AVe reach the § 928(a) question because we feel that the claim for legal fees made in this court should be decided under § 928(a), even though our views with respect to legal fees under § 926 in the district court would be equally applicable to fees in this court. The rationale for this position is that we see the 1972 Amendments to the LHWCA as superseding § 926 in that they provide for the first time what is clearly a congressional preference that attorneys’ fees not diminish the recovery of a claimant regardless of how close a case might be which is litigated but finally lost by a carrier. This appeal, because it was perfected after the effective date of the 1972 Amendments, should therefore be decided on the law most clearly applicable at that time.
Reference
- Full Case Name
- OVERSEAS AFRICAN CONSTRUCTION CORP., Employer, and St. Paul Mercury Insurance Co., Carrier, Appellants-Cross v. Eugene McMULLEN, by George McMullen, and John D. McLellan, Jr., Deputy Commissioner, United States Employees Compensation Commission, Second Compensation District, Appellees-Cross
- Cited By
- 22 cases
- Status
- Published