American River Transportation Company v. Benson
Filing
17
WRITTEN Opinion entered by the Honorable Amy J. St. Eve on 11/27/2012: The Court grants Defendant Jesse Benson's motion to dismiss 11 . The Court grants Defendant Benson's motion to dismiss as to Count I without prejudice and as to Count II with prejudice. All pending dates and deadlines are stricken. Civil case terminated. [For further details see minute order.] Mailed notice(kef, )
Order Form (01/2005)
United States District Court, Northern District of Illinois
Name of Assigned Judge
or Magistrate Judge
Amy J. St. Eve
CASE NUMBER
12 C 6222
CASE
TITLE
Sitting Judge if Other
than Assigned Judge
DATE
11/27/2012
American River Transportation Company vs. Jesse Benson
DOCKET ENTRY TEXT
The Court grants Defendant Jesse Benson's motion to dismiss [11]. The Court grants Defendant Benson’s
motion to dismiss as to Count I without prejudice and as to Count II with prejudice. All pending dates and
deadlines are stricken. Civil case terminated.
O[ For further details see text below.]
Notices mailed by Judicial staff.
STATEMENT
On August 7, 2012, Plaintiff American River Transportation Co., Inc. (“ARTCO”) filed a two-count
Complaint against Defendant Jesse Benson (“Benson”) seeking a declaratory judgment and recovery of
maintenance and cure payments. (R. 1, Compl.) On September 27, 2012, Benson filed a motion to dismiss
the Complaint. (R. 11, Mot. to Dis.) For the following reasons, the Court grants the motion.
FACTUAL BACKGROUND
ARTCO is a Delaware corporation that operates commercial towboats. (Compl. ¶ 2.) Jesse Benson
sought employment from ARTCO on or about September 2007. (Id. ¶ 4.) Benson underwent a physical
examination and completed a health questionnaire before ARTCO hired him on October 4, 2007. (Id. ¶¶ 45.) During the examination and on his questionnaire, Benson denied ever having been diagnosed with or
treated for any low back pain or injury. (Id. ¶ 5.) On June 3, 2010, Benson boarded an ARTCO boat. (Id. ¶
7.) On June 5, 2010, Benson informed the boat’s pilot that he had injured his abdomen on June 3, 2010. (Id.
¶ 8.) Benson left the boat and underwent treatment for a hernia, the cost of which ARTCO paid along with
maintenance and wage payments. (Id. ¶ 8-9.)
Courtroom Deputy
Initials:
12C6222 American River Transportation Company vs. Jesse Benson
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In October 2010, before Benson returned to work, he complained of back pain. (Id. ¶ 10.) ARTCO
refused to pay for treatments for this back pain based on his failure to report any pain until several months after
working on ARTCO’s boat. (Id.) Benson’s doctor diagnosed Benson with congenital spondylolisthesis that
predated Benson’s employment with ARTCO. (Id. ¶ 11.) Benson then received treatment for his back and
continued to receive treatment after he returned to work on ARTCO’s vessels in March 2011. (Id. ¶ 12.) On
January 3, 2012, Benson received an order for physical therapy after his doctor analyzed the results of a magnetic
resonance imaging scan of his back. (Id. ¶¶ 13-15.) Benson did not inform ARTCO of the treatment he received
or the prescribed physical therapy. (Id. ¶ 15.)
On January 22, 2012, ARTCO removed Benson from the boat on which he was working after he
complained of back pain. (Id. ¶ 16.) Benson told ARTCO, during a phone interview on January 31, 2012, that he
had never sought treatment for back pain prior to June 5, 2010. (Id. ¶ 21.) Benson subsequently obtained
additional medical treatment for this back pain. (Id. ¶ 17.) ARTCO paid for some of Benson’s medical treatment
and paid Benson maintenance amounting to $5,627.09. (Id.) At some point, based on the belief that Benson was
not entitled to maintenance and cure for his alleged back injury, ARTCO ceased paying Benson maintenance and
cure. (Id. ¶ 23.)
LEGAL STANDARD
I.
Rule 12(b)(1)
The standard the Court employs on a Rule 12(b)(1) motion to dismiss for lack of subject matter
jurisdiction depends on the purpose of the motion. See Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440,
443-44 (7th Cir. 2009); United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003) (en
banc), overruled on other grounds by Minn-Chem, Inc. v. Agrium, Inc., 683 F.3d 845 (7th Cir. 2012). If, as here,
a defendant challenges the sufficiency of the allegations regarding subject matter jurisdiction, the Court must
accept all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the plaintiff. See
Apex Digital, 572 F.3d at 443-44; United Phosphorus, 322 F.3d at 946. “Where jurisdiction is in question, the
party asserting a right to a federal forum has the burden of proof, regardless of who raises the jurisdictional
challenge.” Craig v. Ontario Corp., 543 F.3d 872, 876 (7th Cir. 2008).
II.
Rule 12(b)(6)
“A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which
relief may be granted.” Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir.
2009). Under Rule 8(a)(2), a complaint must include “a short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The short and plain statement under Rule 8(a)(2) must “give
the defendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.
Ct. 99, 2 L. Ed. 2d 80 (1957)). Under the federal notice pleading standards, a plaintiff's “factual allegations must
be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. Put differently, a
“complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on
its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Twombly,
550 U.S. at 570). “In evaluating the sufficiency of the complaint, [courts] view it in the light most favorable to
the plaintiff, taking as true all well-pleaded factual allegations and making all possible inferences from the
allegations in the plaintiff's favor.” AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). A plaintiff
may plead himself out of court by alleging facts showing that he has no legal claim. See Peterson v. McGladrey
& Pullen, LLP, 676 F.3d 594, 600 (7th Cir. 2012); Atkins v. City of Chi., 631 F.3d 823, 832 (7th Cir. 2011).
12C6222 American River Transportation Company vs. Jesse Benson
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ANALYSIS
I.
Declaratory Judgment
ARTCO seeks relief under the Declaratory Judgment Act, 28 U.S.C. §§ 2201. “The Declaratory
Judgment Act empowers federal courts to give declaratory judgments in ‘a case of actual controversy within its
jurisdiction,’ but it is not an independent grant of jurisdiction, rather jurisdiction must be predicated on some
other statute.” Newell Operating Co. v. Int’l Union of United Auto., Aero., & Agric., Implement Workers of Am.,
532 F.3d 583 (7th Cir. 2008) (quoting 28 U.S.C. § 2201(a)). Because ARTCO asserts its claims under the general
maritime law of the United States, this Court has jurisdiction pursuant to 28 U.S.C. §1333.
The Declaratory Judgment Act provides, in relevant part: “In a case of actual controversy within its
jurisdiction, . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights
and other legal relations of any interested party seeking such declaration, whether or not further relief is or could
be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be
reviewable as such.” 28 U.S.C. § 2201(a). To satisfy Article III standing and the “actual controversy”
requirement of 28 U.S.C. § 2201 “[t]he declaratory judgment plaintiff must be able to show that the feared
lawsuit from the other party is immediate and real, rather than merely speculative.” See Hyatt Int’l. Corp. v.
Coco, 302 F.3d 707, 712 (7th Cir. 2002) (citing Lake Carriers’ Ass’n v. MacMullan, 406 U.S. 498, 506-07, 92 S.
Ct. 1749, 32 L. Ed. 2d 257 (1972) and Norfolk Southern Ry. Co. v. Guthrie, 233 F.3d 532, 534-35 (7th Cir.2000)).
“[D]istrict courts possess discretion in determining whether and when to entertain an action under the
Declaratory Judgment Act, even when the suit otherwise satisfies subject matter jurisdictional prerequisites.”
Wilton v. Seven Falls Co., 515 U.S. 277, 282, 115 S. Ct. 2137, 132 L. Ed. 2d 214 (1995) (citing Brillhart v.
Excess Ins. Co., 316 U.S. 491, 62 S. Ct. 1173, 86 L. Ed. 2d 1620 (1942)). “If a district court, in the sound
exercise of its judgment, determines after a complaint is filed that a declaratory judgment will serve no useful
purpose, it cannot be incumbent upon that court to proceed to the merits before staying or dismissing the action.”
Id. at 288.
ARTCO seeks a declaratory judgment that Benson misrepresented and concealed the condition of his back
and/or that he is otherwise not entitled to maintenance and/or cure from ARTCO. (Compl. ¶ 30.) Under general
maritime law, the vessel and its owners must pay maintenance and cure to a seaman who falls sick or becomes
wounded in the service of the ship. See Atlantic Sounding Co., Inc. v. Townsendi, 557 U.S. 404, 413, 129 S. Ct.
2561, 174 L. Ed. 2d 382 (2009). In addition to wages, “maintenance” includes food and lodging at the expense of
the ship, and “cure” refers to medical treatment. Id. (citing Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438,
441, 121 S. Ct. 993, 148 L. Ed. 2d 931 (2001). ARTCO paid Benson for some maintenance and medical
expenses following his January 22, 2012 complaints of back injury, though ceased these payments at some point
prior to filing its Complaint in this case. (Compl. ¶¶ 17, 23.)
ARTCO cites three cases from outside of the Seventh Circuit to support its claim that there is an
immediate and inevitable controversy. (R. 15, Mot. to Dis. Opp. at 4-6.) In each of these cases, unlike here, the
employer either was already paying maintenance and cure or faced an immediate request regarding payment of
medical expenses.
In Rowan Co., Inc. v. Griffin, 876 F.2d 26, 28 (5th Cir. 1989), Rowan sought a declaratory judgment
regarding its obligation to pay maintenance and cure to seaman Griffin after Griffin’s doctor stated that he had
fully recovered. The court held that there was an actual, not hypothetical or conditional, question before the
court, even though Griffin had not made a formal or informal demand for continued payments. Id. Specifically,
the court wrote that “all of the acts necessary for resolution of the merits of the claim . . . occurred prior to the
12C6222 American River Transportation Company vs. Jesse Benson
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filing of Rowan’s complaint.” Id. Unlike Rowan, ARTCO was not paying Benson maintenance and cure at the
time it filed suit. Additionally, Rowan faced a change in the status quo, namely that Griffin had fully recovered,
which it sought to address before ceasing its payments. There is no similar change in circumstance facing
ARTCO that necessitates immediate resolution.
Similarly, in U.S. v. Martin, Civ. A. No. 00-CV-303, 2001 WL 122224, at *2 (E.D. Pa. Feb. 8, 2001), the
shipowner issued a declaratory judgment when the seaman failed to attend a medical examination and refused to
reschedule an examination which would have allowed the shipowner to determine if the seaman was cured.
Specifically, the court reasoned that “[a]bsent a declaratory judgment, the U.S. would be required to either
continue to pay maintenance and cure without the ability to determine whether Martin had achieved cure, or
terminate payments to Martin upon the possible sanction of consequential damages.” Id. ARTCO does not face
the same dilemma as the U.S. as it ceased paying Benson before filing suit and has not alleged that Benson
currently seeks payment or additional treatment. Indeed, many of ARTCO’s allegations relate to treatment
Benson sought without informing ARTCO. (Compl. ¶¶ 11-15.) ARTCO has not alleged that Benson will seek
reimbursement for those treatments in the future other than making the conclusory statement that “ARTCO
believes litigation as to this controversy is imminent and inevitable.” (Id. ¶ 24.)
Although, as here, the seaman in Torch, Inc. v. Theriot, 727 F. Supp. 1048, 1050 (E.D. La. 1990), had not
demanded payment for medical treatment, the seaman’s doctor contacted the shipowner to obtain a guarantee of
payment for upcoming surgery. Even viewing the facts in the light most favorable to ARTCO, there is no
immediate medical procedure facing Benson and no immediate question of payment facing ARTCO. ARTCO
may very well fear that Benson will one day demand payment, however, “[a]pprehension of litigation alone does
not make a threat immediate and real.” Am. Acad. of Orthopaedic Surgeons v. Cerciello, No. 12 C 3868, 2012
WL 5471108, at *2 (N.D. Ill. Nov. 9, 2012) (citing Int’l Harvester Co. v. Deere & Co., 623 F.2d 1207, 1211 (7th
Cir1980)).
Based upon the facts alleged by ARTCO, the Court finds that there is no immediate threat of litigation and
no actual question ripe for resolution at this time. The Court, therefore, grants Benson’s motion to dismiss
ARTCO’s declaratory judgment claim without prejudice.
II.
Recovery of Maintenance and Cure
ARTCO claims that Benson should reimburse ARTCO for the maintenance and cure payments ARTCO
paid Benson relating to his preexisting congenital spondylolisthesis. (Compl. ¶¶ 32-37.) Specifically, ARTCO
alleges that Benson forfeited his right to maintenance and cure under general maritime law because he
misrepresented and/or concealed his prior medical history and conditions. (Id.)
Under maritime law, a seaman forfeits his right to maintenance and cure if he intentionally misrepresented
or concealed medical facts that were material to the decision to hire him. See Smith v. Apex Towing Co. 949 F.
Supp. 667, 671 (N.D. Ill. 1997) (citing Deisler v. McCormack Aggregates, Co., 54 F.3d 1074, 1080 (3rd Cir.
1995). Specifically, “[w]here the seaman is required to provide pre-employment medical information and the
seaman intentionally misrepresents or conceals material medical facts, the disclosure of which is plainly desired,
then he is not entitled to an award of maintenance and cure, if the injury incurred on the employer's vessel is
causally linked to the concealed medical condition.” Id. (citing Wactor v. Spartan Transp. Corp., 27 F.3d 437,
352 (8th Cir. 1994); McCorpen v. Central Gulf S. S. Corp., 396 F.2d 547, 549 (5th Cir. 1968)) (internal
quotations omitted). This is known as the McCorpen defense.
ARTCO claims that this Court should allow it to recover the maintenance and cure payments it paid to
Benson based on the fact that the McCorpen defense would prevent Benson from receiving maintenance and cure.
12C6222 American River Transportation Company vs. Jesse Benson
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Neither party has cited any authority from the Seventh Circuit regarding whether a cause of action exists for
recovery of maintenance and cure payments. Instead, ARTCO relies on one unpublished Ninth Circuit opinion
and a few district court opinions to support its claim for relief. (Mot. to Dis. Opp. at 7-11.) None of these cases,
however, bind this Court. See e.g., Joseph Stevens & Co., Inc. v. Cikanek, No. 08 C 706, 2008 WL 2705445, at
*3 (N.D. Ill. July 9, 2008) (“‘Binding precedent regarding interpretation of federal law is set only by the Supreme
Court, and for the district courts within a circuit, only by the court of appeals for that circuit.’ ” (quoting In re
Starlink Corn Prods. v. Aventis Cropscience U.S. Holding, 211 F. Supp. 2d 1060, 1063 (N.D. Ill. 2002))).
Moreover, none of theses cases persuade this Court to carve out a cause of action based upon an existing defense.
First, although in Vitcovich v. Ocean Rover O.N. the Ninth Circuit held that the district court did not err in
granting summary judgment for a shipowner on its counterclaim for reimbursement of maintenance and cure
against a pro se seaman, the court did not directly address the validity of a cause of action for recovery. No. 9435047, 1997 WL 21205, at *4 (9th Cir. Jan. 14, 1997). The court analyzed whether the shipowner had met the
elements of the McCorpen defense without discussing the legal basis for restitution. (Id. at *3-4.) Similarly, in
Quiming v. International Pacific Enterprises, Ltd., 773 S. Supp. 230 (D. Hawaii 1990), the court discussed the
elements of the McCorpen defense but did not address the issue of whether maritime law supports a cause of
action for the recovery of maintenance and cure payments.
The Court also finds ARTCO’s citation to Souviney v. John E. Graham & Sons, unpersuasive as that court
focused its analysis on the McCorpen defense and did not provide any legal citation for its conclusion that the
shipowner could recover the benefits it paid the seaman. Civ. A. No. 93-0479-B-C, 1994 WL 416643, at *5 (S.D.
Ala. Apr. 1, 1994). In addition, ARTCO’s citation to Phillips v. Hunter Martine Transp., Inc., 09-CV-0997SCW, 2012 WL 4471646, at *8 (S.D. Ill. Sept. 26, 2012) is inapposite as the employer invoked diversity
jurisdiction, rather than admiralty jurisdiction, and asserted a claim for fraud and material misrepresentation.
Finally, although the district court in Boudreaux v. Transocean Deepwater, Inc., Civ. A. No. 08-1686,
2011 WL 5025268, at *2 (E.D. La. Oct. 20, 2011) addressed the issue at hand, this Court is not bound by that
court’s decision. Indeed, the court in Boudreaux acknowledged that recovery of maintenance and cure payments
was a res nova issue in the Fifth Circuit and that “very few courts in the country have addressed the issue.” Id. at
*3, *5. Relying on the admiralty principles from McCorpen and its progeny, the court held that an employer may
seek restitution in special circumstances. Id. at *5. The court noted, however, that the “facts of this case are
unique because the seamen not only failed to disclose his condition during the initial stages of employment but
also concealed it by failing to timely disclose it to his employer and his own attorney until years later, and then
only on the eve of the ruling on the McCorpen issue.” Id. at *5. Notably, the court certified the case for appeal
and the Fifth Circuit has yet to review the district court’s decision. See Boudreaux v. Transocean Deepwater,
Inc., Civ. A. No. 08-1686, at *1 (E.D. La. Dec. 7, 2011).
This Court refuses to create an affirmative cause of action based on the McCorpen defense. The Court’s
findings do not, however, preclude ARTCO from utilizing the McCorpen defense in a related lawsuit. The Court
also does not rule out the possibility that ARTCO may recover under another theory of liability based on
Benson’s alleged misrepresentations. ARTCO, however, has not provided the Court with any legal basis or
policy rationale to recognize that maritime law supports a cause of action for recovery of maintenance and cure
payments. The Court, therefore, dismisses Count II with prejudice.
CONCLUSION
For the foregoing reasons, the Court grants Defendant Benson’s motion to dismiss as to Count I without
prejudice and as to Count II with prejudice.
12C6222 American River Transportation Company vs. Jesse Benson
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