In Rudolph v. D.R.D. Towing Company, LLC, Mr. Rudolph, who worked for D.R.D Towing aboard the M/V RUBY E, allegedly sustained injuries when the M/V MARTIN CHALLENGER collided with his vessel. — So.3d —, 2012 WL 1415135, No. 11-CA-1074(La.App. 5 Cir. 4/24/12). Three days after the incident, before receiving medical treatment or legal advice, Mr. Rudolph signed an agreement in favor of his employer entitled “Release of All Rights” and received $3,000 in exchange for, inter alia, a “release of everything.” On the release form, Mr. Rudolph answered in the affirmative when asked whether he knew that signing the release document settles and ends every right or claim he had for damages as well as for past and future maintenance and cure and wages. Nevertheless, Mr. Rudolph testified he thought the release only applied to his personal belongings, which were lost when the RUBY E sank, and the “unpleasant experience” of enduring the accident.
About three months later, Mr. Rudolph sued the owner of the MARTIN CHALLENGER and his employer, D.R.D. Towing, for personal injuries under the Jones Act and general maritime law. The trial court granted D.R.D.’s exception of res judicata, holding that plaintiff’s claims had been settled by the above-referenced release agreement.
On appeal, the Louisiana Fifth Circuit reversed, finding that Mr. Randolph signed the release without a “full understanding and knowledge of his rights and a full appreciation of the consequences of the release,” holding that the employer “failed to meet its burden of proving the seaman’s release was valid.”
The four factors weighing on the validity of a seaman’s release are:
- Adequacy of the consideration: Was the plaintiff fairly compensated given the extent of his injuries, and the inherent risk of trying the case?
- The medical advice available and given to the plaintiff: Was the plaintiff fully advised of his injuries and future prognosis?
- The legal advice available and given: Was the plaintiff fully advised of his rights?
- The arms length of the parties: Was there overreaching?
Regarding the first factor, the Court found the consideration of $3,000 was “obviously not adequate” to cover Mr. Rudolph’s property losses (computer, cell phone, car key, and other items) as well as any medical expenses sustained. Regarding the second and third factors, the Court emphasized that, although medical and legal advice was available, it had not yet been given. Mr. Rudolph had scheduled an appointment with a doctor but had not yet been examined. Nevertheless, Mr. Rudolph was required to read and rewrite in his own handwriting a statement acknowledging that “doctors and other persons make mistakes, and I am taking the risk that what they may have told me is wrong. If that should be the case, it is my loss, and I cannot back out of the settlement.” The fact that Mr. Rudolph wrote this statement before seeing the doctor indicated to the Court that plaintiff did not understand the agreement. Finally, there was no evidence that plaintiff’s potential Jones Act or maintenance and cure claims had been explained to Mr. Rudolph before signing the release.
Quoting Borne v. A & P Boat Rentals No. 4, Inc., 780F.2d 1254 (5th Cir. 1986), the Court acknowledged that “if employers are denied any degree of confidence in the finality of settlement, seaman will lose the option to settle since employers will have little incentive to avoid full-scale trial on the merits,” and reasoned that “courts should not be unduly protective of a seaman who has signed a release fully comprehending the nature of his actions.” Under the reasoning of Rudolph, however, it is difficult to conceive of a seaman’s personal injury settlement that would not be void if entered before the first doctor visit, particularly if the seaman is not represented by counsel.
Author: Charles E. Rothermel