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Foulk v. Donjon Marine Co.

October 29, 1998

LAYNE B. FOULK AND MARJORIE E. FOULK, HUSBAND AND WIFE,
PLAINTIFFS,
V.
DONJON MARINE COMPANY, INC.,
DEFENDANT AND THIRD-PARTY PLAINTIFF,
V.
BREAKWATERS INTERNATIONAL, INC.,
THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Joseph E. Irenas, U.S.D.J.

HONORABLE JOSEPH E. IRENAS

OPINION

IRENAS, District Judge

I. BACKGROUND

In 1993, the Borough of Avalon, New Jersey hired Breakwaters International, Inc. ("Breakwaters") to install an artificial reef off its coast to prevent beach erosion. On May 13, 1993, Breakwaters contracted with Donjon Marine Company, Inc. ("Donjon") to provide material barges, tugs, a floating crane barge, a barge crew, and a commercial dive crew for the project. Donjon agreed to maintain insurance coverage for the project, name Breakwaters as an additional insured on its relevant insurance policies, and supply Breakwaters with certificates of insurance certifying that it had obtained the required insurance. See Contract at 14-15, 27-28. Relatedly, Donjon agreed to include in each insurance policy a waiver of each insurer's rights of subrogation against both Donjon and Breakwaters. See id. at 14-15.

Donjon duly complied with each of these terms. Donjon added Breakwaters as an additional insured to its existing general liability insurance policy and provided Breakwaters with proof of the addition. See Breakwaters' Exs. B, C. As requested, the policy also waived all rights of subrogation against Donjon and Breakwaters:

Notwithstanding anything to the contrary contained herein, Underwriters [The London Institute Companies ("London")] hereon waive all rights of subrogation whatsoever against each and every named Assured. London Policy at 51.

On June 30, 1993, Donjon and Breakwaters modified their agreement over the telephone. Since Donjon's divers were non-union and Breakwaters needed to fulfill a union labor project requirement, the parties reversed part of the original arrangement such that Breakwaters rather than Donjon would supply the commercial dive crew. See Creter Dep. at 48-49; Witte Dep. at 62. One of these divers was plaintiff, Layne Foulk.

According to Donjon, the parties also reversed part of the insurance arrangement: Breakwaters agreed to provide insurance covering the divers and name Donjon as an additional insured on its relevant insurance policy. Immediately following this conversation, Donjon sent a letter to Breakwaters confirming this modification:

We wish to confirm our telephone conversation of today's date at which time you advised that you would be supplying certain labor for this project. . . . We will also require evidence of insurance including seaman's risks with Donjon named as assured for any and all labor provided by you.

Letter from John Witte, President, Donjon, to Richard Creter, President, Breakwaters (June 30, 1993). Breakwaters received the letter that day and raised no objection to its contents. See Creter Dep. at 34. However, Breakwaters failed to name Donjon as an additional insured on its commercial general liability insurance policy.

Construction began on July 10, 1993 under Breakwaters' direction. Donjon's crane barge, the Farrell 256, was to install the artificial reef from the sea with the help of an underwater dive crew. Mr. Foulk and three other commercial divers were to assist in the placement of the artificial reef by spotting its location and unhooking pieces of the reef from the crane once they had been placed. For the duration of the project, the dive crew was to sleep ashore and report each morning to the Farrell 256 by motor launch. In addition to its use as a crane barge, the Farrell 256 was to serve as a dive station for the dive crew, holding air compressors, a communications box, and other diving equipment for the project.

On the first day of construction, Breakwaters successfully installed three pieces of the artificial reef in this manner. To connect these to each other and to a pre-existing jetty, the barge crew re-rigged the crane with a "clamshell bucket," filled it with several tons of stone, and lowered it into the water near the jetty. Mr. Foulk swam over to the bucket and began to guide the stone drop when he found himself being pushed through the water towards the jetty. Before he could take evasive action, the clamshell bucket pinned Mr. Foulk against the jetty and severely injured him. Once freed, the Coast Guard rushed Mr. Foulk to a local hospital where doctors treated him for crushed right arm, rib fractures, a collapsed lung, and an injured right shoulder

Marjorie E. Foulk and Layne B. Foulk ("Plaintiffs") instituted this action sounding in negligence and the general maritime law. The original complaint named as defendants Breakwaters and Donjon, respectively, Mr. Foulk's employer and the owner of the barge from which Mr. Foulk was working at the time of the accident. Plaintiffs thereafter filed a first amended complaint to name only Donjon as a defendant.

Although the first amended complaint is not a model of clarity, at this point in the litigation plaintiffs were essentially asserting that Layne Foulk was engaged in maritime employment under the Longshore and Harbor Workers' Compensation Act ("LHWCA"), 33 U.S.C. § 901 et seq. As such he was entitled to no fault benefits from his employer, Breakwaters, which in fact he has received, and a claim for "negligence of the vessel" against Donjon under 33 U.S.C. § 905(b). It was this latter claim which was essentially being asserted in the amended complaint. However, this pleading also alleged that the vessel Farrell 256 was unseaworthy, a general admiralty claim available to injured seaman, but not to workers covered by LHWCA. See Derr v. Kawasaki Kisen K.K., 835 F.2d 490, 492 (3d Cir. 1987). Thus, the first amended complaint contained two inconsistent claims, but no claim against the employer under the Jones Act, 46 U.S.C. § 688.

Conceptually, the LHWCA is mutually exclusive with other federal worker compensation systems. However, if an injured plaintiff is characterized as a seaman, his remedies are not under the LHWCA, but rather under the Jones Act, 46 U.S.C. § 688 and pursuant to maritime claims known as cure and maintenance and unseaworthiness of the vessel. Jones Act and cure and maintenance claims must be brought against the injured party's employer, while unseaworthiness claims can be brought against either the employer or the owner of the vessel. In this case Breakwater rather than the vessel owner, Donjon, was the employer. Thus, if Layne Foulk is a seaman, Breakwater may bear the cost of compensating plaintiffs since negligence would impose liability, while Donjon would be liable only if the vessel is found unseaworthy, a much heavier burden. If he is a non-seaman maritime worker, Donjon rather than Breakwater is exposed to all the liability. *fn1 There is an obvious gray area between Jones Act and LHWCA liability, and it is in this shadowy field that this litigation game has been played.

After being served with the first amended complaint which named it as the sole defendant, Donjon responded by naming Breakwaters as a third-party defendant and later amended its third-party complaint pursuant to Federal Rule of Civil Procedure 14(c) to add a claim under the Jones Act, against Breakwaters and in favor of plaintiffs. Not surprisingly, Donjon took the position that the injured plaintiff was a seaman rather than a maritime worker covered by LHWCA. It is also from the final pretrial order that following the third party complaint plaintiff embraced the position that Layne Foulk was a seaman and dropped the LHWCA claim in favor of the Jones Act claim, although there was no formal amendment to the complaint. Plaintiffs continued to assert the general maritime claim for unseaworthiness of the vessel.

On April 9, 1997, this Court granted Breakwaters partial summary judgment finding that Mr. Foulk is not a seaman within the meaning of the Jones Act. See Foulk v. Donjon Marine Co., 961 F. Supp. 692 (D.N.J. 1997). The plaintiffs and Donjon filed an interlocutory appeal of this decision to the Third Circuit Court of Appeals. After finding that the pleadings and actions of the parties were sufficient to invoke admiralty jurisdiction, the Court held that there was jurisdiction to entertain the interlocutory appeal pursuant to 28 U.S.C. § 1292(a)(3). On May 11, 1998, the Third Circuit Court of Appeals reversed the decision of this court and held that the question of whether Foulk was a "seaman" under the Jones Act was a matter to be decided by the trier of fact.

Relying on the decision of the Third Circuit, Breakwaters moves this Court to strike plaintiffs' request for a jury trial. Breakwaters and Donjon also move this Court to strike Marjorie E. Foulk's loss of consortium claim since such a claim is unavailable under the Jones Act. Because the Third Circuit has ruled that the plaintiffs have brought their Jones Act claim in admiralty, this court will grant both the motion to strike the jury trial for that claim and any related general maritime claim to the extent that it is hereafter determined that Layne Foulk is a seaman. The motion to strike the loss of consortium claim based on the Jones Act is ...


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