Washington State Court Rules On Punitive Damages In Maintenance and Cure Claim - Orders Icicle To Pay Injured Fisherman Over 2 Million Dollars

March 16, 2012 by James Beard

Beard Stacey & Jacobsen, LLP has established a landmark decision for an injured seaman before the Washington State Supreme Court. The ruling yesterday declares that there is no pre-established arbitrary cap on a seaman’s right to punitive damages for the wrongful withholding of maintenance and cure benefits.

Accepting Dana Clausen’s team of lawyers’ arguments, the Washington State Supreme Court denied Icicle Seafoods’ attempt to cap a seaman’s right to punitive damages. In Clausen v. Icicle Seafoods, Inc., Case No. 85200-6, the Washington Supreme Court upheld a jury verdict of 1.3 million dollars in punitive damages against Icicle. The jury found Icicle’s conduct in refusing to pay the injured seaman’s medical bills and maintenance in an amount of $35,000 to be willful, wanton and malicious conduct, and that it was financially motivated. The Court rejected Icicle’s argument that the Supreme Court’s decision in the Exxon Valdez case required that there be a one-to-one ratio of compensatory damages to punitive damages. The Washington Supreme Court stated the policy and purpose of punitive damages is to punish and deter egregious conduct and rejected Icicle’s argument that punitive damages should be capped based upon the size of the underlying claim. The Court noted that, because of Icicle’s conduct, Clausen, who had suffered a back injury in a lifting accident aboard Icicle’s vessel, had been forced into poverty and was forced to move into a broken down wreck of a travel trailer while trying to live on just a $20 a day living allowance.

The Clausen decision is also notable as it ruled compensatory attorney fees, as well as punitive damages, are available to injured seamen who are wrongfully denied benefits. Icicle’s argument that attorney fees were not to be considered as part of the compensatory award was rejected, as was their argument that the attorney fees must be decided by the jury.

During the Clausen trial, defense trial counsel was held to have breached the discovery rules and was sanctioned. In a separate post trial proceeding involving the Washington State Bar Association, defense trial counsel received further sanctions. These sanctions revolved around the failure to produce a secret medical report commissioned by Icicle. The undisclosed medical report recommended injections and surgery for Clausen, but the information was never disclosed to Clausen.

The threat of punitive damages in maintenance and cure cases serves a vital and critical role in the system of justice for injured seamen and fishermen. The Supreme Court of the United States has declared that maintenance and cure benefits are to be free of uncertainties and should be liberally administered. Over the past twenty years without the threat of punitive damages, many vessel owners have ignored their maritime obligation and wrongfully withheld benefits, causing severe hardship to their injured workers. The Washington Supreme Court decision yesterday, together with the Supreme Court of the United States decision in Townsend v. Atlantic Soundings, will ensure in the future that maintenance and cure benefits are promptly and fairly provided to injured seamen. In the past two years since the decision in Townsend and the trial court’s decision in Clausen, the average maintenance rate for injured seamen has more than doubled, and vessel owners have been far more responsive to seamen’s needs for medical care.

Jim Jacobsen of Beard Stacey & Jacobsen, and Larry Curtis represented Dana Clausen during the two-week jury trial. They associated Phil Talmadge, a retired Supreme Court Justice, for purposes of appeal. The 7-2 Clausen decision was issued by the Washington Supreme Court on March 15, 2012 and can be found at Case No. 85200-6.