Maritime. The Concealment Defense. and the Importance of Employment Physicals

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1 Maritime N E W D E V E L O P M E N T S The Concealment Defense and the Importance of Employment Physicals Donna Adelsberger & Associates, P.C. Attorneys at Law December 2005 Articles by Lisa Reeves (Cell) Main Office 6 Royal Avenue Glenside, PA (Telephone) (Telefax) New Jersey Office One Greentree Centre, Suite 201 Marlton, NJ (Telephone) (Telefax) The vast majority of Jones Act cases involve back, neck, shoulder or knee injuries. As any risk manager knows, these types of injuries can prevent a seamen s employment in physically demanding jobs on the water. Many seamen are not well educated, and hence, are unable to obtain sedentary or light-duty employment that pays as well as seamen s work. As a result, future wage loss or loss of earning capacity claims can be staggering. In many such cases, discovery reveals that the claimant had a pre-existing degenerative condition that was exacerbated or became symptomatic as a result of the accident. As any good personal injury attorney will tell you, this is not a defense to liability and has a questionable impact on damages. Maintenance and cure obligations arise any time an injury occurs or an illness manifests during the course of the seamen s employment, even though the injury may not have been caused by that employment. More importantly, the general maritime law of maintenance and cure requires that the employer pay for all medical treatment and maintenance (i.e. living expenses) until the seaman reaches maximum medical improvement, unless the seaman knowingly concealed the prior condition when he was hired. Therefore, it is extremely important to screen your job candidates for pre-existing conditions, prior work-related or other injuries, and any prior periods of total or partial disability. Similarly, the nature of the job and its physical requirements, such as lifting, climbing, et cetera, must be explained to the applicant in detail and documented. If a proper screening is done, and if the seaman knowingly conceals a past injury or disability, the obligation to pay maintenance and cure may be set aside. In order to take advantage of the concealment defense, the seaman must have been specifically asked about injuries or conditions affecting the same part of the body injured during the course of his employment. He or she need not volunteer the information, even though he may have had surgery or been temporarily disabled prior to the time he/she is hired by the vessel owner. Another way to protect the company is to require a physical examination, accompanied by a detailed questionnaire to be filled out and signed by the seaman. Also, it is important that the physician who examines the seaman on the prospective employer s behalf, be aware of the job description and physical requirements. Too often, we see standard DOT examinations designed to screen prospective truck drivers, who are not necessarily exposed to the same heavy labor and unstable conditions that are faced by a seaman. Finally, the employer must be careful not to run afoul of ADA requirements when screening prospective applicants. For more information in designing a program for your particular hiring needs, please contact Lisa Reeves.

2 EXPERT WITNESSES When Experience Trumps Credentials There are times when the number of letters after your expert s name and length of his C.V. are important. Cases involving complex science or medicine often require that your expert be very well qualified in his or her field. In many other cases, however, it is more important that your witness have hands on experience with the subject matter of his testimony. I learned this lesson from my first trial, a cargo case in which the plaintiff alleged that the fruit had been carried at too low a temperature, resulting in condition problems upon discharge. My carefully chosen expert for the shipowner was a well respected professor of horticulture with a PHD who specialized in the breakdown of fruit as a result of chilling damage. Plaintiff s expert was a local surveyor whom, I thought, was no match for my highly qualified professor. I was wrong. Although he held no advanced degrees, the surveyor had spent the past ten years surveying cargo upon arrival in Philadelphia, which imports a large amount of fruit. As a result, the surveyor had seen hundreds of fruit cargos, and had even visited the load port in South America and was allowed to testify as to its handling and storage prior to loading. My professor, on the other hand, had no first hand knowledge of reefer ships, and spoke from the ivory tower of his university about experiments carefully performed under laboratory conditions. The judge was unimpressed by his credentials, and awarded full damages to the plaintiff cargo owner. Similarly, a recent arbitration award confirms that experience trumps credentials in personal injury cases as well. The plaintiff s expert was an marine engineer with several advanced degrees and a long list of cases in which he had previously testified. He carefully researched all of the codes, regulations and standards, which suggested, but did not mandate, that non-skid paint should be used on the decks of fishing boats. Our expert, on the other hand, did not even have a high school degree, but owned a fleet of fishing vessels and had been in the business for over twenty years. He testified that the plaintiff was in charge of the vessel at the time of the incident, and should have taken greater care for his own safety, especially when he knew that there had been an oil leak on deck. Despite the absence of a non-skid surface and a rather worn deck, the arbitrator held that non-skid paint was not required by law, and would not have prevented the accident. Although the vessel was found unseaworthy due to the hydraulic leak, the arbitrator reduced the resulting damages significantly due to plaintiff s contributory negligence. Notwithstanding the fact that the arbirtator had no prior knowledge of maritime law or the commercial fishing industry, it was obvious that our practical expert made more of an impression than the professional witness and his references to the technical properties of non-skid applications and various industry standards. Above all else, the chosen expert must be a good witness he must be personable and able to hold his own on cross examination. Although prepping the witness is essential, it is even more important to meet with him before committing in order to assess his credibility, likeability, and appeal to the judge and/or jury. In the federal courts, all experts must reveal the recent cases in which he or she has testified, which is a valuable tool in the vetting exercise. Contact as many attorneys from those cases as possible experts who seem solid on the telephone and on paper have been known to fall apart on cross-examination. In conclusion, you and your attorney must interview, investigate and follow your instincts when choosing an expert witness. In many cases, personality and practical experience may be more important than credentials and a long resume. p e r s o n a l i t y a n d p r a c t i c a l e x p e r i e n c e a r e o f t e n m o r e i m p o r t a n t t h a n c r e d e n t i a l s

3 A Victory for Marine Contractors In an ongoing pier damage case, the district court has dismissed a claim that pile driving is an abnormally dangerous activity giving rise to strict liability for any damage which results. This is a victory for marine contractors and their underwriters, as the Court ruled that no such liability can be imposed unless the contractor s negligence or fault is proven. The doctrine of strict liability for abnormally dangerous activities is set forth in the Restatement of Torts, and has been adopted in most, if not all, jurisdictions. The most common example of such an activity is blasting or use of explosives, which most state courts have found to be abnormally dangerous because it is an uncommon activity which poses an unusually high risk of damage even if carried out in a reasonably careful manner. The courts determine whether an activity is abnormally dangerous by analyzing several factors, none of which is determinative in and of itself. These factors are set forth in the Restatement (Second) of Torts, 520 (1977): In addition to a negligence claim, the pier owner claimed that the contractor should be held strictly liable for any damage shown to be the result of the vibrations created by the pile driving. We filed a motion on behalf of the contractor, and sought to dismiss the strict liability count as a matter of law, arguing that the action was governed by admiralty law, which simply did not recognize strict liability. While conceding that the claim sounded in admiralty, the pier owner argued that state law was not pre-empted by admiralty law in this instance, and further that strict liability was often imposed in admiralty cases involving products liability and pollution damage. In a well reasoned opinion, the District Court agreed with the contractor on all points. She found that admiralty did not recognize strict liability except by statute and in products liability cases. She also found that although New Jersey courts had not addressed the issue of strict liability as applied to pile driving, an analysis of the six factors weighed against a finding that pile driving was an abnormally dangerous activity. Finally, she concluded that even if New Jersey courts were to disagree, any resulting law would be preempted by admiralty law. Although some states impose strict liability for pile driving, others do not, and therefore the application of state law to maritime cases would destroy uniformity and is therefore preempted. In reaching this opinion, the District Court cited with approval the Great Lakes/Chicago Flood line of cases, in which marine pile driving was found to have caused massive flooding in the city of Chicago during the early 1990s. In that case, both the federal and state courts confirmed that pile driving was not an abnormally dangerous activity under either maritime or Illinois state law. This is indeed a victory for marine contractors and their underwriters, who might otherwise be liable without fault even though the contractor was simply complying with the technical specifications in the construction contract. It should be noted that the decision, a copy of which is available upon request, is not necessarily binding in other jurisdictions or in other cases, each of which must be examined on its own merits. (a) existence of a high degree of risk of some harm to the person, land or chattels of others; (b) likelihood that the harm that results from it will be great; (c) inability to eliminate the risk by the exercise of reasonable care; (d) extent to which the activity is not a matter of common usage; (e) inappropriateness of the activity to the place where it is carried on; and (f) extent to which its value to the community is outweighed by its dangerous attributes. In the case under discussion, a commercial pier owner claimed that his pier had collapsed as a result of the pile driving being performed by a marine contractor in the course of nearby construction in the river.

4 Criminal Liability Port Captians/Operations Directors Beware It goes without saying that the Coast Guard will investigate any serious maritime incident, and the officers and crew of the vessel involved are fully aware that their actions will be closely scrutinized, and that action may be taken against their licenses. The ship owning company knows that it is exposed to civil fines and penalties, as well as civil liability for any damages that result. It has also become apparent that in the event of a high profile incident, especially one involving death or pollution, the Captain and perhaps other crewmembers could face criminal prosecution by local, state or federal authorities. Early on in the company s investigation of the accident, it is imperative that the potential for criminal liability be examined and separate counsel must be appointed to represent the mariners, whose interests may not be identical to those of the company. In recent years, a new layer of complexity has been added to the aftermath of a serious casualty or pollution incident. In addition to the prosecution of the individual mariners and the imposition of fines and penalties against the corporation, the port captain, operations manager and/or other management level personnel in the office are now exposed to individual prosecution, large fines, and even jail time. This occurs most often following a pollution incident or a disaster involving multiple injuries and/or deaths, especially of passengers or other innocent bystanders. The most prominent examples are ocean dumping by certain cruise lines and the 2003 crash of the Staten Island Ferry, which caused 11 deaths and many more injuries. The fairness of these prosecutions varies widely, and of course depends on your point of view. Few would argue with the prosecution of an intoxicated captain or a port engineer who orders pollutants to be dumped overboard. However, most operations directors would not expect to be criminally prosecuted because they failed to make sure that there were two captains on the bridge at all times. Nonetheless, this is exactly what happened in the aftermath of the ferry disaster in New York harbor. In addition to the pilot in command at the time of the crash, the ferry director was also charged with manslaughter because he did not enforce the ferry s policy that there should be two pilots in the wheelhouse at all times. Similarly, shoreside managers of tank barges and other vessels have been prosecuted for failing to ensure that the ship s crew did not dump oily waste overboard. In both of these situations, the omissions of the shoreside manager may well constitute negligence which results in the civil liability of the company, but the criminal prosecution of the individual in the office who did not intentionally violate Protecting Claim Strategies from D I S C L O S U R E Risk managers can no longer assume that communications with other management personnel or the insurance company about potential claims are protected from disclosure in the event that litigation ensues. Contrary to popular belief (held by lawyers as well as claims people), such communications are not protected in some jurisdictions unless those involved had a reasonable expectation that litigation was imminent. Communications concerning a potential claim (by a seaman, passenger or other third party) generally fall within one of several categories, some of which are always discoverable and others which are almost certainly protected unless privilege is waived. Anything generated in the ordinary course of business (i.e. a notation in the deck log or incident report which is required for all accidents) fall into the former category (discoverable) while communications between you and your attorney are privileged and thus not discoverable by the claimant. Unfortunately, there is a large grey area in between, which includes the notice of a potential claim sent to your insurer and communications (including s) between the claims manager and operational personnel following an accident for investigative or advisory purposes. Such communications may or may not fall within the work product doctrine which protects documents or communications generated by an attorney and others if prepared in anticipation of litigation. The courts vary in their interpretation of this doctrine. Strict constructionists almost require a direct threat of a lawsuit, while others realize that communications following any accident, particularly those which involve personal injury, are drafted with an eye toward litigation. There is no bright line test for

5 Criminal Liability any standard or regulation is more problematic. In light of the fact that some statutes provide for strict criminal liability (i.e. liability without fault or negligence) for certain types of pollution, the situation is even more ominous. These prosecutions are most likely to occur in the wake of a high profile incident, particularly one that threatens human life or the environment. In such cases, it is extremely important to get competent counsel involved immediately. Although there are exceptions, most maritime lawyers are not well versed in criminal law, and criminal lawyers do not generally understand the nuances of maritime law. You may very well need to appoint criminal counsel as well as a maritime lawyer to represent the company, and often the individuals involved will need their own counsel as well. In a perfect world, the attorneys will work together as much as possible to protect the interests of everyone involved. The purpose of this article is not to keep A HOLIDAY MESSAGE port captains, port engineers and other shoreside managers awake at night, but rather to caution that the actions of your captains and mates at sea can have dire consequences, which could effect you personally. In the event of any serious incident, consult with counsel as soon as possible, preferably before you are interviewed by authorities. Above all else, any statements or documents which you do provide to the Coast Guard or other authority must be one hundred percent accurate. The most common indictments in these types of cases are obstruction of justice and making false statements. Similarly, never change a log book entry or back date any document. Remember, Martha Stewart did not go to jail for insider trading, but rather for lying to investigators. Do not make the same mistake within your company, and encourage your seagoing employees to be equally forthright. Important Note: The author is not a criminal lawyer, and this article, as well as the others in this newsletter, is intended to raise awareness, and should not be considered legal advice. Warm Wishes for a Happy Holiday and a Bright New Year Instead of sending holiday cards this year, we have made a donation to Habitat for Humanity. Disclosure determining whether your in house memoranda, correspondence with the claims handler and other potentially damaging documents will have to be produced to the other side. You can, however, take some precautions to ensure that your opinions on your company s potential liability and damage exposure remain confidential. The best method of protecting your communications is to retain counsel following any accident or injury, even if he or she simply monitors the situation until litigation ensues. If you have inhouse counsel or your insurance adjuster is an attorney, do not assume that all communications with that individual are protected, as that individual may not be acting in her capacity as the company s attorney at the time. Although it never hurts to stamp all claim related materials with Privileged and Confidential and Attorney-Client Privilege, that alone will not protect the documents. Similarly, simply copying an attorney on correspondence does not necessarily make it privileged, but, again, it does not hurt. The intent or mind set of the writer is also important to a determination as to whether the company anticipated litigation when he drafted the memorandum or in question. As soon as possible, the risk manager or claims handler should memorialize the fact that he or she anticipates that this claim could result in litigation, thus ensuring (hopefully) that all documents which follow will remain confidential. Finally, and perhaps most importantly, stop and remember that your flippant or memorandum disparaging the character of the claimant or any other notation may someday be read by that person or his attorney, and may come back to haunt you. Use caution and discretion in communicating about potential claims, and your company and underwriter will be better protected in the event of a lawsuit.

6 Donna Adelsberger & Associates, P.C. Donna Adelsberger & Associates, P.C. was established in 1995 following the dissolution of Krusen Evans & Bryne, a well known insurance and maritime firm in the Philadelphia area for more than fifty years. We continue to practice primarily in the areas of insurance defense and coverage litigation with emphasis on premises liability, errors and omissions, trucking accidents, products liability, and all aspects of admiralty law. We also maintain a general practice, including estates and commercial litigation. We are admitted to practice in Pennsylvania and New Jersey state and federal courts. Mary Elisa Reeves 2005 Woman of the Year Women s International Trade Association Lisa has twenty years of experience in maritime litigation and Coast Guard investigations including collisions, groundings, oil spills, injuries, cargo claims, arrests, attachments and commercial disputes on behalf of vessel owners, tugboat, ferry and commercial fishing boat operators, mariners and their underwriters. Lisa enjoys yoga and volunteering on the historic tallship GAZELA. B.A., University of Michigan (English) J.D. magna cum laude, Washington College of Law, American University (1985) Active member and former director of various port and trade associations Director of Maritime Law Association of the United States ( ) Vice President, Ports of Philadelphia Maritime Society (2005-Present) Associate Editor of American Maritime Cases Donna Adelsberger Donna s practice focuses on personal injury defense, employment law and coverage litigation. She is also a classical pianist. B.A. summa cum laude, Temple University J.D., Temple University School of Law (1988) Formerly with State Farm Insurance ( ) Adjunct Professor, Temple University School of Law ( ), Penn State University (2004-Present) Pro Bono Attorney for Support Center for Child Advocates (representing abused children in family court and criminal proceedings). Howard Wishnoff Since joining the firm in 2002, Howard s practice consists of personal injury defense, commercial litigation and insurance-coverage work. Howard enjoys travel abroad and is a computer enthusiast. B.A., Temple University J.D., Temple University School of Law (1984) Former Senior Trial Attorney for Prudential Property and Casualty Insurance Co. Susan J. Wiener Sue defends personal injury cases and litigates commercial disputes. She is also an avid runner of 5K races. B.B.A. magna cum laude, Temple University (Business Administration, 1988) J.D. cum laude, Temple University School of Law (1992) Participant in the Philadelphia Mock Trial Competition (1995 to present). David Trevaskis David s practice includes education law, estate planning and general litigation. B.A., M.A.T., Duke University J.D. cum laude, Temple University School of Law (1988) Founder of LEAP-KIDS in 2001, dedicated to the development and training of law-related education. Director of Pro Bono Programs for the Pennsylvania Bar Association (2001-present). Paralegals Kelly Eckert and Phoebe Montayne

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