Jauch v. Nautical Services, Inc., 470 F.3d 207 (5th Cir. 2006)
Allyson L. Vaughn, 3L, University of Mississippi School of Law
The U.S. Court of Appeals for the Fifth Circuit recently heard a maritime case involving an injured seaman who failed to disclose previous back injuries. While the court affirmed the denial of maintenance and cure under general maritime law, the seaman was permitted recovery for damages according to the Jones Act.
In October 1999, Nautical Services, Inc. hired Jon Jauch to serve as a member of the crew on the M/V Madonna, an oceangoing tug. Jauch was required to complete a physical examination as well as a medical history questionnaire prior to securing employment. On the questionnaire, Jauch failed to inform Nautical Services of his prior back injuries and treatment received from a chiropractor. He also failed to disclose a previous workers’ compensation claim and psychiatric treatment. According to Nautical Services’ physician, had Jauch disclosed this information additional documentation and medical evaluation would have been required prior to hiring.
A week after Jauch began his employment he was injured while working with the captain of the tug and two other crew members to move a johnboat ashore for maintenance. He received no formal training as to the proper method for such a procedure, but instead imitated the captain. Jauch complained of back pain after the incident but continued to work and performed some weightlifting later that afternoon.
After several days of complaining about the pain, Jauch was diagnosed with lumbosacral strain by an orthopedist referred by Nautical Services. In May 2002 Jauch would undergo lumbar disc fusion surgery.
In April 2001, Jauch brought suit against Nautical Services in the U.S. District Court for the Eastern District of Louisiana. He sought damages under the Jones Act as well maintenance and cure under maritime law. The district court denied the maintenance and cure claim, found Jauch and Nautical Services equally liable and awarded past medical expenses. Nautical Services was ordered to pay Jauch almost two hundred thousand dollars. Jauch then appealed the district court’s decision to the Fifth Circuit Court of Appeals based on four grounds. He maintained that the court misapplied the McCorpen rule in denying his maintenance and cure claim, he denied any fault in the accident, and he claimed that the court erred in calculating his medical expenses and also erred in denying prejudgment interest. Nautical Services also appealed the finding of fault and the awarding of medical expenses despite the denial of maintenance and cure.
Fifth Circuit Review
Upon review, the Fifth Circuit held that maintenance and cure recovery are barred because Jauch intentionally concealed previous injuries and mental health conditions, in accordance with principles the court had previously described in the McCorpen case: maintenance and cure is provided in maritime law to compensate seamen who fall ill or are injured while in the service of a vessel; the liability of the vessel owner does not depend on fault, but is a contractual agreement implied in the contract of employment; however, if a seaman knowingly or fraudulently conceals a pre-existing condition at the time of employment, the vessel owner is not responsible to compensate for additional injury.1
A seaman only has to disclose a previous condition under two circumstances: (1) if the seaman believes the owner would consider the injury important or (2) if the shipowner requires a medical examination as part of the hiring process.2 If a seaman conceals his condition to the vessel owner he will not be barred from recovery unless the owner can prove that (1) the injured claimant intentionally misrepresented or concealed important medical facts, (2) that were material to the employer’s decision to hire the seaman, and (3) there is a connection between the withheld information and the injury that serves as the basis for the lawsuit.3
Had Jauch revealed his previous condition he would likely not have obtained employment and would not have been present on the M/V Madonna at the time of the accident. The Court of Appeals found that the district court properly applied the McCorpen rule and barred Jauch from recovering maintenance and cure for his injuries because Jauch had concealed his previous medical history during a medical examination designed to reveal such injuries.
The court discussed the apportionment of fault claim next. An appellate court overturns a lower court’s finding of apportionment of fault only if it finds clear error. The district court did not err in finding both parties equally responsible for the accident, according to the Fifth Circuit. There was sufficient evidence that Jauch was negligent in failing to remain attentive and failing to secure his rope while lowering the boat and Nautical Services was negligent for failing to instruct him on the proper method for completing the task.
Finally, the Fifth Circuit reviewed the damages award from the district court. Nautical Services cross-appealed the award contending that because Jauch’s claim for maintenance and cure was denied the lower court erred in awarding damages for past medical expenses. The court rejected this argument because “the seaman’s right to receive, and the shipowner’s duty to pay, maintenance and cure is independent of any other source of recovery for the seaman.”4 Therefore, the district court’s dismissal of the claim for maintenance and cure had no legal effect on Jauch’s entitlement to recover medical expenses under the Jones Act.
On Jauch’s claim that the district court erred in computing the award of medical expenses, the court found that the formula applied was unclear. The district court awarded Jauch only a portion of the total amount of medical expenses incurred as a result of the accident. However, there was no clear standard set forth in the record. On this claim, then, the court found that reviewing for error was impossible and the district court would have to resolve the matter and create a more detailed record.
The final issue addressed involved the district court’s ruling on prejudgment interest. Prejudgment interest is interest that accrues on a loss during the time prior to the court’s award of damages. Prejudgment interest may be appropriate in Jones Act cases depending on the circumstances of each case. The district court denied prejudgment interest without providing any explanation, so the appeals court could not review the denial and remanded for a more detailed analysis.
The Fifth Circuit affirmed the denial of maintenance and cure as well as the apportionment of fault between Jauch and Nautical Services. The award of past medical expenses and the denial of prejudgment interest was vacated and returned to the district court to reconsider the claims and provide the appeals court with a more detailed record for review.
1. McCorpen v. Cent. Gulf S.S. Corp., 396 F.2d 547 (5th Cir. 1968).
2. Jauch, 470 F.3d at 212.
4. Id. (quoting Bertram v. Freeport McMoran, Inc., 35 F.3d 1008, 1013 (5th Cir. 1994))