Without a showing of any fault, a shipowner under general maritime law has a duty to provide maintenance, cure, and unearned wages to a seaman who becomes ill or is injured while in the service of the ship. Aguilar v. Standard Oil Co., 318 U.S. 724, 730-31 (1943). “Maintenance” is traditionally defined as a “living allowance for food and lodging”; “cure” is the payment of medical expenses incurred in treating the seaman’s injury or illness; and “unearned wages” are wages for the period from the onset of the injury or illness until the end of the voyage. Dean v. Fishing Co. of Alaska, Inc., 177 Wash.2d 399, 406 (2013). The shipowner’s duty to pay maintenance and cure continues until the seaman reaches maximum medical improvement, which is reached “when the seaman recovers from the injury, the condition permanently stabilizes or cannot be improved further.” Dean at 406. A shipowner’s duty to pay maintenance and cure is “virtually automatic.” Baucom v. Sisco Stevedoring, LLC, 506 F.Supp.2d 1064, 1073 (S.D. Ala. 2007). Punitive damages and attorneys’ fees may be awarded upon a showing of a shipowner’s willful and arbitrary refusal to pay maintenance and cure. Atlantic Sounding Co., Inc. v. Townsend, 557 U.S. 404 (2009).
The amount of maintenance provided to a seaman is frequently in dispute after a seaman becomes ill or injured while in the service of the ship. Many insurance carriers or vessel owners still often try to set a maintenance rate based solely upon the seaman’s actual living expenses. This approach has been consistently rejected by many different U.S. jurisdictions, which instead consider the “reasonable amount of maintenance.” Barnes v. Sea Hawaii Rafting, LLC, 16 F.Supp.3d 1171, 1177 (D. Haw. 2014) (“In other words, if a seaman’s actual expenses for rent are quite low because he cannot afford adequate housing, as appears to be the case here, this does not mean that he is not entitled to a reasonable amount of maintenance.”); Hall v. Noble Drilling, 242 F.3d 582, 589-590 (5th Cir. 2001); Fuller v. Calico Lobster Co., Inc., 527 F.Supp.2d 184, 187 (D. Mass. 2007).
Most recently, the Eastern District of Louisiana in Jefferson v. Baywater Drilling, LLC, No. 14-1711, 2015 WL 365526 (E.D. La. January 27, 2015) found that a seaman, plaintiff L.B. Jefferson, was entitled to recover maintenance at the rate of $40.00 per day when Jefferson’s actual expenses only totaled approximately $700 per month, or $23.33 per day. The case arose from a disabling skin condition which Jefferson alleged he contracted on July 16, 2014 while working aboard the IDB CAILLOU. The court considered whether Jefferson was entitled to maintenance and cure, and if so, whether the denial of these benefits was unreasonable, willful, or wanton.
Following release from a hospital after surgery, Jefferson moved in with his sister and was responsible to pay the household bills, including groceries, cable, light and gas, which totaled $23.33 per day. In calculating Jefferson’s maintenance rate, the court noted Jefferson’s “feather light” burden of proving his actual expenses of $23.33 per day and relied upon the following three-part test established in Hall v. Noble Drilling for determining the amount of a maintenance award:
1. A court estimates the plaintiff’s actual costs of food and lodging, and the reasonable cost of food and lodging for a single seaman in the plaintiff’s locality.
2. The court then compares the above actual versus reasonable costs to each other. When actual expenses exceed reasonable expenses, the court should award reasonable expenses. Conversely, when reasonable expenses exceed actual expenses, ordinarily the court should award actual expenses.
3.But, if reasonable expenses exceed actual expenses, the court inquires whether the plaintiff’s actual expenses are inadequate to provide him with reasonable food and lodging. When actual expenses are inadequate, the court should award reasonable expenses.
In applying the above test, the court found that Jefferson’s reasonable expenses totaled $40.00 per day. Even though the court noted that in this scenario (where reasonable expenses exceeded actual expenses), a maintenance award should generally not exceed actual expenses, the court found that “no reasonable seaman could live on $23.33 per day” and held that Jefferson was entitled to recover maintenance at the rate of $40 per day. Critically, the court noted in further support of this ruling that “[t]he Court’s research indicates that $30 per day is the lowest maintenance award approved by any court in this District since the year 2000.” See Conclusion Of Law No. 14 & Footnote No. 32. The court further held that the investigation of Jefferson’s case was “impermissibly lax” and that the denial of maintenance and cure was arbitrary and capricious. Therefore, the court ruled that Jefferson was entitled to compensatory damages, punitive damages, and attorneys’ fees.
Jefferson v. Baywater provides the most recent illustration of the unwillingness by courts to impose low maintenance rates on seamen, even when a seaman’s actual expenses could arguably support a lower maintenance award. Maintenance rates set by vessel owners and insurance companies should be carefully analyzed with the help of experienced maritime law attorneys to ensure the highest possible maintenance rate for the injured seaman. You may be entitled to a maintenance rate adjustment and not yet know it.