The usual rule in litigation is that each party pays its own attorney’s fee. It’s called the “American Rule.” There are exceptions to this rule, however. One such exception has to do with maintenance and medical bills of a seaman who is injured while working. In a case pending in front of the Washington State Supreme Court, a case being handled by Beard Stacey & Jacobsen, LLP, all sorts of issues regarding an attorney’s fee award are being considered when the employer fails to pay maintenance and cure. Maintenance and cure is a fundamental right to each seaman who has been injured while in the vessel’s service. The OSCEOLA, 189 U.S. 158, 175, 23 S. Ct. 483, 47 L. Ed. 760 (1903); Vaughan v. Atkinson, 369 U.S. 527, 532, 82 S. Ct. 997, 8 L. Ed. 2d 88 (1962). This is a no-fault obligation that must be paid. Some employers, however, refuse to fulfill their obligation and willfully withhold maintenance and cure. The pending Washington State Supreme Court case, Clausen v. Icicle Seafoods, Inc., addresses what remedies are available to the seaman when the employer fails to fulfill his or her obligation to maintenance and cure.
Paying attorney fees is nothing new in maritime law. Refusing to pay a seaman’s maintenance and cure is an action where the court regularly orders the wrongful party to pay attorney fees. The ability to recover attorney fees for this refusal is established by Vaughan v. Atkinson, 369 U.S. 527, 82 S. Ct. 997, 8 L.Ed.2d 88 (1962). At its core, the Court’s decision in Vaughan is to allow seamen wrongfully denied maintenance and cure to recover attorney fees and is designed to make the injured seaman “whole” again. In this case, Vaughan “was forced to hire a lawyer and go to court to get what was plainly owed to him under laws that are centuries old.” 369 U.S. at 531; Terra West Townhomes, L.L.C. v. Stu Henkel Realty, 996 P.2d 866, 873 (Mont. 2000). This willful denial of maintenance and cure constitutes the bad faith exception to the American Rule, which is a remedy “to compensate a party who, through no fault of [his or] her own, was forced to hire an attorney….” Hutto v. Finney, 437 U.S. 678, 689 n.14, 98 S. Ct. 2565, 57 L.Ed.2d 522 (1978).
Legally speaking, attorney fees are classified as compensatory principles as opposed to punitive damages. This is a very important distinction because the amount of punitive damages one can recover is related to the amount of awarded compensatory damages. Numerous federal courts have concurred with Vaughan, holding that fees under the bad faith exception rest on compensatory issues. Sierra Club v. U.S. Army Corps of Engineers, 776 F.2d 383, 389-90 (2nd Cir. 1985), cert. denied, 475 U.S. 1084 (1986). The United States Supreme Court agreed in Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718, 87 S. Ct. 1404, 18 L.Ed.2d 475 (1967). Such classification attempts to dissuade employers from withholding maintenance and cure as well as increase potential awards for seamen’s pain and inconvenience.
Furthermore, both federal and Washington courts have confirmed that maintenance-and-cure-based attorney fees are equity-based. Paul citing Vaughan, 106 Wn. App. 406, 426 & n.84, 24 P.3d 447; Id. At 37, 904 P.2d at 737. Very similar to the bad faith exception, this equity basis helps both dissuade unnecessary disputes and delays in obligations. This distinction is significant because, as the court held in Brown v. Safeway Stores, Inc., 94 Wn.2d 359, 367, 617 P.2d 704, 709 (1980), “trials court[s] [have] wide discretion in cases involving both legal and equitable issues, to allow a jury [trial] on some, none, or all issues presented.” The Ninth Circuit Court of Appeals added “[w]here a court of equity assumes jurisdiction because the complaint requires equitable relief, the court has power to award damages incident to the complaint.” United States v. Martinson, 809 F.2d 1364, 1367-68 (9th Cir. 1987).
The law offices of Beard Stacey & Jacobsen, LLP is dedicated to ensuring you don’t have to pay attorney fees brought on by unnecessary actions by employers. In a recent case involving a seaman who was wrongfully denied his maintenance and cure, the jury found in favor of the seaman after a two-week trial. The seaman, Dana Clausen, was awarded $453,000 in compensatory damages, as well as $1.3 million in punitive damages from Icicle Seafoods, Inc. Based on Icicle’s willful and wanton denial of Clausen’s right to maintenance and cure, the court ordered Icicle to pay the attorney fees and costs, totaling $387,558, which resulted from this unnecessary dispute. This ensured Clausen did not have to pay any unnecessary attorney fees and will dissuade employers in the future from withholding maintenance and cure. If you have been denied your right of maintenance and cure or have been injured while in the service of a vessel, please call the law offices of Beard Stacey & Jacobsen, LLP at (206) 282-3100 or visit our website at www.maritimelawyer.us.