In Stermer v. Archer-Daniels-Midland Co., 2014 WL 2515387 (La. App. 3d Cir. June 4, 2014), plaintiff was employed as a cook aboard an inland towing vessel on the Mississippi River. Ms. Stermer alleged that she had sustained injuries to her wrist and ankles when the vessel she was aboard bumped into its tow, causing her to lose her balance and fall forward onto her hands and roll her right ankle. She reported the incident six days later after her wrist and ankle had become painful and swollen. Three days later, Ms. Stermer’s employer transported her to a hospital for medical treatment. After examination and x-ray she was diagnosed with bilateral hand and wrist sprains along with a right ankle sprain. Ms. Stermer then returned to the vessel and continued her duties for an specified amount of time before being flown back to Louisiana.
Ms. Stermer’s employer conducted an investigation into the accident, and the truthfulness of her claims were hotly contested by the captain and a deckhand aboard her vessel. Shortly after leaving the vessel, Ms. Stermer received a letter from her employer stating that its investigation had determined that her injuries had not manifested themselves in service of the vessel and that her employer would decline to make voluntary maintenance and cure payments. Another letter followed shortly thereafter accusing Ms. Stermer of untruthfulness and notifying her that her employment had been terminated.
Subsequent to her termination, Ms. Stermer continued treatment of her wrist and ankle. By three months post-accident all of Ms. Stermer’s complaints had subsided with exception of her right wrist. An MRI revealed a scapholunate ligamentous tear in the wrist that Ms. Stermer’s treating physician related to the incident aboard the towboat, despite Ms. Stermer disclosing that she had suffered from wrist pain for four years preceding the accident. Steroidal injections failed to provide relief for the injury and Ms. Stermer eventually underwent surgery to repair the ligament. Although Ms. Stermer’s former employer was provided with information throughout the course of her treatment, they continuously refused to provide payments for maintenance and her medical care. The wrist surgery was initially recommended in 2008, but Ms. Stermer’s former employer did not agree to pay for the procedure until 2010.
Ms. Stermer eventually filed suit against her former employer and their insurer in Acadia Parish alleging Jones Act negligence, unseaworthiness, retaliatory discharge, and unreasonable refusal to pay maintenance and cure. At trial Ms. Stermer was successful in proving her injuries and was awarded over $600,000 in general and compensatory damages. Additionally, the trial court also found that Ms. Stermer’s employer’s failure to pay maintenance and cure for over two years was arbitrary and capricious and awarded punitive damages in the amount of $300,000.
Ms. Stermer’s employer appealed the trial court’s grant of punitive damages up to the Louisiana Court of Appeals for the 3rd Circuit, but to no avail. Upon review of the trial court record, the appellate court found that Ms. Stermer’s employer had totally relied on the statements of the captain and deckhand disputing the validity of the injury without giving due consideration to medical and circumstantial evidence corroborating Ms. Stermer’s claims. The court stated that “. . . the totality of the evidence leads to the conclusion that once [Ms. Stermer’s employer] had evidence that no accident occurred, it did not consider evidence corroborating Ms. Stermer’s claim . . . .” Because the employer’s investigation was “neither diligent nor reasonable”, the court found no error in the trial court’s conclusion that the employer was arbitrary and capricious in denying maintenance and cure.
While this decision is shocking with regard to the amount of punitive damages awarded for the failure to pay maintenance and cure, it highlights the importance of conducting a thorough investigation after the report of any on the job injury. The appellate court placed great weight on its finding that Ms. Stermer’s employer abandoned its investigation after obtaining evidence disputing the validity of the injury. Moreover, this decision should also serve as a cautionary reminder of the great risk involved in denying maintenance and cure, even where there is evidence challenging the validity of a claim. In this case, the failure to pay for what was likely nominal medical expenses ended up costing the employer and their insurer $300,000 in punitive damages alone.
Author: Tripp Dubose