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BRUNETTI v. CAPE CANAVERAL SHIPPING CO.

October 19, 1983

PETER BRUNETTI, Plaintiff,
v.
CAPE CANAVERAL SHIPPING CO., S.A., Defendant



The opinion of the court was delivered by: LASKER

LASKER, D.J.

 Peter Brunetti, a longshoreman, filed suit on October 12, 1976, seeking damages for personal injuries sustained on February 2, 1974 while he was working aboard a ship owned by defendant Cape Canaveral Shipping Company, S.A. ("Canaveral"). Canaveral moves for summary judgment dismissing the complaint on the ground that suit is barred under the assignment provision of the Longshoreman's and Harbor Workers' Compensation Act (the "Act"), 44 Stat. 1424, as amended, 33 U.S.C. § 901 et seq. Section 33(b) of the Act provides:

 
"Acceptance of [workers"] compensation under an award in a compensation order filed by the deputy commissioner or [Benefits Review] Board shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against [any] third person unless such person shall commence an action against such third person within six months after such award."

 33 U.S.C. § 933(b).

 Brunetti applied for and began receiving compensation from his employer, Pittston Stevedores Company ("Pittston"), immediately following his injury. At an informal conference before a United States Department of Labor claims examiner, at which Brunetti and Pittston appeared through counsel, a settlement was reached fixing compensation for a period of temporary total disability and for permanent partial disability. The claims examiner filed a "Memorandum of Informal Conference" reflecting the agreement on October 31, 1975. *fn1" Pittston made its last compensation payment to Brunetti on November 14, 1975, as reflected in Form BEC-208(F), "Compensation Payment Stopped or Suspended," filed by Pittston with the Department of Labor. *fn2"

 Canaveral argues that Brunetti's acceptance of compensation pursuant to the Memorandum of Informal Conference operated as an assignment of his rights against third persons because suit was not filed until nearly a year after the Memorandum of Informal Conference was filed and the last payment made. Brunetti contends that the Memorandum of Informal Conference was not an award of compensation within the meaning of Section 33(b), and therefore did not trigger the six-month period after which an assignment of rights to the employer takes place.

 In Rodriguez v. Compass Shipping Co., Ltd., 617 F.2d 955 (2d Cir. 1980), aff'd on other grounds, 451 U.S. 596, 101 S. Ct. 1945, 68 L. Ed. 2d 472 (1981) the Court of Appeals of this Circuit held that a longshoreman's acceptance of payment under an agreement reached at an informal conference before a claims examiner does trigger the provisions of Section 33(b) of the Act, and that a suit brought against the shipowner more than six months after acceptance of such a payment could not be sustained because the longshoreman's rights had been irrevocably assigned to the employer. *fn3" In rejecting the argument that only the filing of a formal compensation order, which in Rodriguez had not been done, could activate the six-month period provided under the Act, the Court stated:

 
"The purpose of the provision for filing of an order was to insure that the claimant-employee knew that he was foregoing his right to sue by acceptance of the compensation agreement. H. Rep. No. 1945, 75th Cong., 3rd Sess. at 9 (1938). Where, as here, the employee, upon signing the compensation agreement with the assistance and co-signature of his counsel, is fully aware of his rights, including his right to sue within six months, the failure of an administrator to comply with the formality imposed by departmental regulations (20 C.F.R. § 702.315, supra) of filing the formal order can have no significance as far as the substantive rights of the parties are concerned."

 617 F.2d at 959. The Court of Appeals reaffirmed Rodriguez in Ambrosino v. Transoceanic Steamship Co., Ltd., 675 F.2d 470 (2d Cir. 1982), which held that 1977 amendments to the Code of Federal Regulations, 20 C.F.R. §§ 702.312 and.315, did not affect the Court's holding in Rodriguez that an agreement reached at an informal conference constitutes an "'award in a compensation order" for the purposes of Section 33(b) of the Act.

 Rodriguez and Ambrosino must be reexamined, however, in light of the Supreme Court's recent decision in Pallas Shipping Agency Ltd. v. Duris, 461 U.S. 529, 103 S. Ct. 1991, 76 L. Ed. 2d 120, 51 U.S.L.W. 4580 (May 23, 1983). In Pallas, the injured longshoreman accepted voluntary compensation payments from his employer, and subsequently filed a complaint against the shipowner more than six months after the last payment was made. Neither a formal compensation order nor a memorandum of informal conference was filed by the deputy commissioner or claims examiner, but the employer did file two documents with the Department of Labor evidencing his voluntary agreement to pay compensation to the longshoreman. The first of these was a Form LS-206, entitled "Payment of Compensation Without Award," which recited the employer's agreement to make bi-weekly payments to the longshoreman; the second, filed two years later, was a Form LS-208, entitled "Compensation Payment Stopped or Suspended," which gave notice that the employer was discontinuing the payments. The Court, stating that "nothing in the Act suggests that the filing of these forms is equivalent to an "award in a compensation order." held that a longshoreman's acceptance of voluntary compensation benefits did not give rise to an assignment under Section 33(b). 51 U.S.L.W. at 4582.

 The facts of the instant case are distinguishable from those of Pallas, because here an informal conference was held and a Memorandum of Informal Conference was filed by the claims examiner, while in Pallas no administrative proceeding had taken place. Nevertheless, as the Third Circuit has recently held in Costa v. Danais Shipping Co., 714 F.2d 1 (3rd Cir. 1983), the language and reasoning of Pallas indicate that the Supreme Court is unlikely to consider a Memorandum of Informal Conference, unaccompanied by the issuance of a formal compensation order, adequate to trigger the assignment provisions of Section 33(b). In Pallas, the Court stated that "the Act continues to equate a "compensation order" [within the meaning of Section 33(b)] with the formal document filed by the deputy commissioner at the conclusion of administrative proceedings, as it has since the LHWCA was enacted." 51 U.S.L.W. at 4582-83. The formal document referred to is distinct from the Memorandum of Informal Conference filed by a claims examiner following an informal conference. *fn4"

 Moreover, the characteristics which, as the Court emphasized, distinguish a formal compensation order from Forms LS-206 and LS-208, also distinguish a formal compensation order from a Memorandum of Informal Conference. Like Forms LS-206 and LS-208, and unlike formal compensation awards, Memoranda of Informal Conference

 
"are not issued by the deputy commissioner; they are neither administratively reviewable nor judicially enforceable; and the failure to make timely payments pursuant to the agreement . . . results in a less substantial penalty than a ...

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