The opinion of the court was delivered by: SPRIZZO
Plaintiff Thomas Speerin, an employee of Ardell Engineering Marine Repair Corp. ("Ardell"), commenced this action against defendant Prudential Lines, Inc. ("Prudential") to recover damages for injuries which he allegedly sustained while working as a pipe fitter aboard Prudential's vessel, the S.S. Santa Barbara. Defendant moved to dismiss for failure to state a claim for which relief can be granted. Fed. R. Civ. P. 12(b)(6). Since matters outside the pleadings have been presented to and have not been excluded by the Court, the motion shall be treated as one for summary judgment pursuant to Rule 56. Fed. R. Civ. P. 12(b)(6).
The essential facts of this case are undisputed. On May 5, 1978, plaintiff was injured while performing repair work aboard defendant's ship. On July 20, 1978, by means of service of a bare summons, plaintiff commenced a personal injury action against defendant in New York State Supreme Court, New York County.
On December 20, 1979, a settlement agreement adjusting plaintiff's compensation claim was executed by plaintiff, plaintiff's counsel, and Ardell's insurer. The stipulation of settlement was executed and delivered to the U.S. Department of Labor, Office of Workers' Compensation Programs ("OWCP") on the same day. Pursuant to 20 C.F.R. § 702.315(a), the OWCP was required to acknowledge and memorialize the settlement within ten days and to issue a final Order within thirty days. In fact, it was not until March 26, 1980 that OWCP notified the parties that it had no objection to the settlement. It was also on March 26, 1980 that OWCP's Deputy Commissioner for the Second Compensation District issued a formal Compensation Order, but only for an award of attorney's fees. See Ex. 2 to Plaintiff's Affirmation in Opposition.
Plaintiff commenced the instant federal action on July 24, 1980. Subsequently, on June 16, 1981, plaintiff discontinued his state court action against the defendant.
The defendant first filed its motion to dismiss on January 29, 1982, but at the request of the parties a decision on the motion was deferred, and the case was placed on the suspense calendar pending the decision of the Supreme Court in Pallas Shipping Agency, Ltd. v. Duris, 461 U.S. 529, 76 L. Ed. 2d 120, 103 S. Ct. 1991 (1983). Following the decision in that case on May 23, 1983, the matter was restored to the Court's active trial calendar, the defendant renewed its motion to dismiss, and further submissions were made by the parties.
The principal issue raised by defendant's motion is whether plaintiff's claim is barred by Section 33(b) of the Longshoremen's and Harbor Workers Compensation Act, ("LHWCA") 33 U.S.C. § 933 (b). That provision provides that:
Acceptance of such [statutorily fixed] 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 such third persons unless such person shall commence an action against such third person within six months after such award.
The defendant contends that the six-month period set forth in Section 33(b) commenced to run on or about December 20, 1979, when the settlement agreement was reached. Plaintiff, on the other hand, asserts that his action is not barred because the settlement agreement executed on December 20, 1979 was a voluntary, private agreement and not a formal "award in a compensation order" within the meaning of § 33(b).
In Rodriguez v. Compass Shipping Co., 617 F.2d 955 (2d Cir. 1980), aff'd 451 U.S. 596, 68 L. Ed. 2d 472, 101 S. Ct. 1945 (1981), the Second Circuit held that "An agreement settling an injured employee's claim to workmen's compensation, signed after an informal conference with a claims examiner, by whom it was approved, constitutes an "award" within the meaning of § 33(b)." Rodriguez, supra, 617 F.2d at 959. The Second Circuit therefore rejected the contention that no assignment of the injured employee's claim had been effected under § 33(b) because neither the deputy commissioner nor the claims examiner had ever filed a formal compensation order.
However, in Pallas Shipping, supra, the Supreme Court unanimously held that, in the absence of a formal compensation order or an award entered by the Secretary of Labor, an employee's acceptance of compensation payments cannot lead to an assignment of his right of action against third parties. Id. at 534. The Court stated:
Section 33(b) triggers an assignment of an injured longshoreman's cause of action against a third party only after he has accepted compensation "under an award in a compensation order filed by the deputy commissioner or Board." (Emphasis added.) The term "compensation order" in the LHWCA refers specifically to an administrative award of compensation following proceedings with respect to the claim. 33 U.S.C. § 919(e) In this case, no administrative proceedings ever took place, and no award was ever ordered by the Deputy Commissioner.
Pallas Shipping, supra, 461 U.S. at 534. (footnote omitted).