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CASTRO v. MAHER TERMINALS

April 14, 1989

LUIS CASTRO, Plaintiff,
v.
MAHER TERMINALS, INC., Defendant



The opinion of the court was delivered by: WOLIN

 In this action for declaratory relief, plaintiff Luis Castro now moves for summary judgment declaring that defendant Maher Terminals, Inc.'s ("Maher") lien for workers' compensation benefits paid pursuant to the Longshore and Harbor Workers Compensation Act ("LHWCA"), 33 U.S.C. §§ 901 et seq., amounts to $ 17,213.92 as a matter of law, as opposed to the $ 18,138.92 claimed by Maher. Maher cross-moves for summary judgment. The $ 925 difference concerns expenditures by Maher for Castro to be examined by doctors at the choosing of either Maher or the Secretary of Labor in order to confirm medical findings made by Castro's own doctor. The Court finds that the costs for these confirmation medical examinations are not benefits to the employee under the terms of LHWCA and should not be included as part of Maher's lien on the funds collected by Castro in his suit against the third-party responsible for his injury. Therefore, the Court will order that the sum of $ 17,213.92 be fixed as Maher's compensation lien.

 I. BACKGROUND

 Plaintiff was employed by Maher as a longshoreman. On April 14, 1987, during the course of his employment, plaintiff suffered serious injuries. After being treated and released from a hospital emergency room, Castro chose Dr. Aruna Patel to be his treating physician. Dr. Patel prescribed medication for Castro and provided treatment. Castro was totally disabled for a period of approximately 16 weeks. During this time, Maher, pursuant to its rights under 33 U.S.C. § 907(d), chose to have Castro examined by two different doctors at a combined cost of $ 550. One of these doctors, Dr. Greifinger, found that plaintiff was able to return to work on June 5, 1987. Plaintiff's physician, Dr. Patel, disagreed with Dr. Greifinger's finding and believed that Castro was still disabled as of July 21, 1987.

 In order to resolve the dispute, a Deputy Commissioner arranged for an impartial examination of Castro by Dr. Kenneth Seslow. Dr. Seslow examined Castro on June 15, 1987, and found that he was totally disabled on June 15, 1987 and that he required another four to six weeks of treatment. Pursuant to 20 C.F.R. § 702.412(a), the Department of Labor charged Maher $ 200 for Dr. Seslow's examination.

 On October 16, 1987, Castro was examined by Dr. Jerome Margolies at the request of Castro's federal compensation representative. Dr. Margolies found that plaintiff sustained a 15% disability of the right arm. Once again, Maher chose to have Castro examined by another physician, Dr. Nelson Manowitz, who found that Castro sustained no permanent disability. Maher eventually settled Castro's disability claim by paying him for a 3% permanent partial disability of the right arm. Maher paid Dr. Manowitz $ 175 for his examination of Castro.

 After plaintiff's accident, he instituted a third party action against Hamilton Trucking Company and Diego Rodrigues. On August 25, 1988, Castro settled the third party action for the sum of $ 46,138.92. Maher subsequently asserted a lien against the settlement for the amount of compensation benefits it paid to Castro under LHWCA. Included in the $ 18,138.92 lien asserted by Maher is the $ 725 Maher paid to doctors it chose to examine Castro and the $ 200 the Department of Labor charged Maher for Dr. Seslow's impartial examination of Castro. Plaintiff objects to the inclusion of the $ 925 and brought the instant action for declaratory relief in order to decide the issue.

 II. DISCUSSION

 The Longshore and Harbor Workers' Compensation Act provides a comprehensive scheme governing an injured longshoreman's rights against the stevedore and shipowner. See Bloomer v. Liberty Mutual Insurance Co., 445 U.S. 74, 100 S. Ct. 925, 63 L. Ed. 2d 215 (1980) (providing a detailed description of the history and purposes of the LHWCA). Essentially, LHWCA is a detailed workers' compensation scheme which sets out the responsibility of the employer to provide medical and compensation benefits to an injured longshoreman. *fn1" LHWCA does not disallow an employee from bringing a separate action against a negligent third party, *fn2" but the Act does not expressly provide for the distribution of amounts recovered in suits brought by longshoremen against third parties. Bloomer, 445 U.S. at 78, 100 S. Ct. at 928. This is in contrast to suits brought by the employer against a third party, for which the Act provides a detailed plan of distribution. 33 U.S.C. § 933(e). *fn3"

 Although the Act does not explicitly provide for an employer's lien on an employee's recovery against a third-party, "courts have uniformly held that the employer has a subrogation right to be reimbursed from the worker's net recovery from a third party for the full amount of compensation benefits already paid." Peters v. North River of Morristown, N.J., 764 F.2d 306 (5th Cir. 1985). Plaintiff does not dispute that Maher has a valid lien, in the amount of compensation and medical payments Maher paid to Castro, against Castro's $ 46,138.92 recovery from Hamilton Trucking Company. Plaintiff does dispute that the expenses Maher incurred by choosing to have Castro examined by physicians of Maher's choosing and the amount charged to Maher by the Department of Labor for the impartial examination of Dr. Seslow are properly considered LHWCA compensation benefits to Castro that are included in Maher's lien.

 Considering first the matter of the $ 200 charge by the Department of Labor, the Court finds that the relevant statutory and regulatory language strongly suggests that the final burden for the expense of an impartial medical examination made pursuant to 33 U.S.C. § 907(e) should be borne by the employer and not transferred to the employee by virtue of the employer's compensation lien. 33 U.S.C. § 907(e) states in part:

 
The Secretary shall have the power in his discretion to charge the cost of examination or review under this subsection to the employer, if he is a self-insurer, or to the insurance company which is carrying the risk. . . .

 The identical language is used in the relevant regulatory guidelines. 20 C.F.R. § 702.412.

 In the present case, the Department of Labor chose to charge to Maher the $ 200 fee for Dr. Seslow's examination. The Department's intent to charge Maher, pursuant to § 907(e), would therefore be thwarted if Maher could claim the $ 200 expense as part of its compensation lien. Such a claim would place the cost burden for the impartial examination on the employee. As there is no statutory support for such a ...


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