The opinion of the court was delivered by: BONSAL
On March 14, 1969, a jury awarded plaintiff Frank Ruggiero damages of $19,500 for injuries resulting from his fall aboard defendant's vessel, the M/S MARION, on January 2, 1964, while he was employed as a longshoreman by Turner & Blanchard, Inc., a stevedoring company. The United States of America (the government), the intervening plaintiff, moved after trial for summary judgment impressing a lien upon the judgment to the extent of compensation payments made to plaintiff out of the Special Fund created by Section 44 of the Longshoremen's and Harbor Workers' Compensation Act (the Act), 33 U.S.C. § 944.
Since 1966, plaintiff has been receiving compensation payments of $54 per week out of the Special Fund, pursuant to an Award dated October 27, 1966, based upon a Compensation Order of June 23, 1966, of Deputy Commissioner Hughes of the Bureau of Employees Compensation for the Second Compensation District, a division of the United States Department of Labor which administers the Act.
In his Compensation Order, Deputy Commissioner Hughes found that as a result of plaintiff's accident on January 2, 1964 aboard the M/S MARION, and of a subsequent accident on August 25, 1964 aboard the S/S MORMAC SCAN while plaintiff was employed by the John W. McGrath Corporation, plaintiff was permanently totally disabled, that each accident contributed 50% to plaintiff's permanent total disability, and that plaintiff was therefore entitled to compensation out of the Special Fund.
Section 8 of the Act, 33 U.S.C. § 908, specifies the compensation payable to an employee for various injuries and disabilities, and subsection (f), pursuant to which plaintiff has been receiving the compensation payments at issue in this case, provides:
"(f) Injury increasing disability: (1) If an employee receive an injury which of itself would only cause permanent partial disability but which, combined with a previous disability, does in fact cause permanent total disability, the employer shall provide compensation only for the disability caused by the subsequent injury: Provided, however, That in addition to compensation for such permanent partial disability, and after the cessation of the payments for the prescribed period of weeks, the employee shall be paid the remainder of the compensation that would be due for permanent total disability. Such additional compensation shall be paid out of the special fund established in section 944 of this title." 33 U.S.C. § 908(f) (emphasis added.)
The government contends that the Special Fund referred to in subsection (f) above is entitled to a lien upon plaintiff's judgment to the extent of payments made to him out of the Special Fund. This appears to be a matter of first impression.
It is well settled that an employer or its insurance carrier is entitled to a lien on a judgment recovered by an employee against a third person on account of injuries for which he has received compensation, to the extent of the compensation paid. The Etna, 138 F.2d 37 (3d Cir. 1943); Fontana v. Pennsylvania R.R., 106 F. Supp. 461 (S.D.N.Y. 1952), aff'd, 205 F.2d 151 (2d Cir.), cert. denied, 346 U.S. 886, 74 S. Ct. 137, 98 L. Ed. 390 (1953).
It is plaintiff's position that the existence of the employers' and insurers' lien is based upon the following provisions of section 33 of the Act:
"(a) If on account of a disability or death for which compensation is payable under this chapter the person entitled to such compensation determines that some person other than the employer or a person or persons in his employ is liable in damages, he need not elect whether to receive such compensation or to recover damages against such third person.
"(b) Acceptance of such compensation under an award in a compensation order filed by the deputy commissioner shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person unless such person shall commence an action against such third person within six months after such award.
"(h) Where the employer is insured and the insurance carrier has assumed the payment of the compensation, the insurance carrier shall be subrogated to all the rights of the employer ...