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Date: 04-22-2010

Case Style: Diamond Offshore Management Co. v. Jonathan Cummings

Case Number: 01-08-00647-CV

Judge: Sherry Radack

Court: Texas Court of Appeals, First District on appeal from the 190th District Court, Harris County

Plaintiff's Attorney: Mark Murray, John Stevenson, and John Schwambach

Defendant's Attorney: Lew Henderson and Jeff Bales

Description: Appellants, Diamond Offshore Management Company and Diamond Offshore Services Company (together, “the Diamond parties”), appeal from a judgment, rendered after a bench trial, in an admiralty case. We determine whether the trial court’s award of future maintenance and cure to appellee, Jonathan Cummings, was in clear error. We reverse that portion of the judgment awarding cure, we affirm that portion of the judgment awarding maintenance and determining the date of maximum medical improvement (“MMI”), and we remand the case.

BACKGROUND

Cummings was an employee of Diamond Offshore Management Company and a crewmember of the OCEAN SPARTAN, a jack-up rig owned by Diamond Offshore Services Company. Cummings, a floor hand, was injured when he fell from the OCEAN SPARTAN’s personnel basket while being transferred onto a crew boat. Cummings injured his shoulder, neck, and back.

Cummings sued the Diamond parties, along with two other entities that were dismissed before trial and are not parties to this appeal, for the vessel’s unseaworthiness, negligence under the Jones Act,[1] and maintenance and cure. Trial was to the court. The court found that no negligence or fault of the Diamond parties caused Cummings’s injuries and that the OCEAN SPARTAN was seaworthy. The court found that Cummings’s fall caused injuries that required medical treatment in the past, but that no past medical expense or cure obligation was owed due to a stipulation that the parties had entered into before trial. The court further found that the fall caused injuries that would require medical treatment in the future and, likewise, that Cummings would “in reasonable probability incur medical expenses in the future.” The court found that Cummings’s MMI would be reached on August 18, 2008, which was six months from the start of trial. The trial court concluded that Cummings was entitled to $112,500 of cure. The court also concluded that Cummings was entitled to maintenance of $4,500, based on the MMI and the maintenance rate of $25 per day that the court had also found.

The court rendered a take-nothing judgment on Cummings’s claims for negligence and unseaworthiness; awarded Cummings $4,500 in future maintenance; awarded him $112,500 in future cure; and recited that MMI would be reached on August 18, 2008. Only the Diamond parties appeal.

MAINTENANCE AND CURE

In three issues, the Diamond parties challenge that portion of the judgment that awarded future maintenance and cure to Cummings. Specifically, they contend that

● Cummings’s right to maintenance and cure “terminated because he ceased to avail himself of curative treatment”;



● the trial court erred in declaring a future date of MMI;



● the trial court erred in awarding a lump sum for future maintenance and for future cure because (i) “there is no obligation to prepay maintenance and cure” and (ii) Cummings’s future back surgery was only a possibility, rather than a definitely ascertainable event; and



● the trial court erred in determining the dollar amount of future cure awarded.



A. The Law

Maintenance and cure are creatures of the general maritime law. “When a state court hears an admiralty case, that court occupies essentially the same position occupied by a federal court sitting in diversity: the state court must apply substantive federal maritime law but follow state procedure.” Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402, 406 (Tex. 1998). In a maintenance-and-cure case, we review a trial court’s findings of fact for clear error and its conclusions of law de novo. See Silmon v. Can Do II, Inc., 89 F.3d 240, 242 (5th Cir. 1996). “[R]eview under the ‘clearly erroneous’ standard is significantly deferential, requiring a ‘definite and firm conviction that a mistake has been committed.’” Concrete Pipe & Prods. of CA, Inc. v. Constr. Laborers Pension Trust for S. CA., 508 U.S. 602, 623, 113 S. Ct. 2264, 2280 (1993) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S. Ct. 525, 542 (1948)); see Fed. R. Civ. P. 52a(6) (“[T]he reviewing court must give due regard to the trial court’s opportunity to judge the witnesses’ credibility.”).

“Maintenance and cure is an ancient remedy peculiar to Admiralty Law arising out of contract and not negligence.” Socony-Vacuum Oil Co. v. Aderhold, 240 S.W.2d 751, 754 (Tex. 1951). “Maintenance is a per diem living allowance paid so long as the seaman is outside the hospital . . . ,” while “[c]ure involves the payment of therapeutic, medical and hospital expenses not otherwise furnished to the seaman . . . .” Prude v. W. Seafood Co., 769 S.W.2d 663, 664 (Tex. App.—Houston [14th Dist.] 1989, no writ). “Maintenance and cure . . . extends during the period when [the seaman] is incapacitated to do a seaman’s work and continues until he reaches maximum medical recovery.” Vaughan v. Atkinson, 369 U.S. 527, 531, 82 S. Ct. 997, 1000 (1962). Maximum medical recovery “is achieved when it appears probable that further treatment will result in no improvement of the seaman’s condition.” Prude, 769 S.W.2d at 664. “Admiralty courts have been liberal in interpreting this [maintenance-and-cure] duty ‘for the benefit and protection of seamen who are its wards.’” Vaughan, 369 U.S. at 531-32, 82 S. Ct. at 1000 (quoting Calmar S.S. Corp. v. Taylor, 303 U.S. 525, 529, 58 S. Ct. 651, 654 (1938)). Accordingly, “[w]hen there are ambiguities or doubts [concerning maintenance and cure], they are resolved in favor of the seaman.” Id.

B. Termination for Failure to Avail Self of Curative Treatment

In issue one, the Diamond parties contend that Cummings’s right to maintenance and cure “terminated because he ceased to avail himself of curative treatment.” They argue that Cummings “has repeatedly ignored the numerous recommendations of his treating physicians to have lower back surgery . . . thereby ceasing to avail himself of curative treatment.” The Diamond parties consider this to have been a willful “reject[tion of] the recommended medical treatment” for his back so that their “obligation to provide additional maintenance and cure to [Cummings] has terminated.”

“The general rule is well settled that a seaman’s right to maintenance and cure is forfeited by a willful rejection of the recommended medical aid.” Coulter v. Ingram Pipeline, Inc., 511 F.2d 735, 737 (5th Cir. 1975). “However, this rule is not inexorably applied and exceptions exist when reasonable grounds for refusing care or failing to follow instructions are shown.” Id. “The question then is whether there existed any extenuating circumstances which made the [seaman’s] failure to follow the prescribed regimen either reasonable or something less than a willful rejection.” Id. at 738.

The trial court concluded that Cummings was entitled to future medical cure. In support, the trial court found that Cummings would in reasonable probability incur future medical expenses for his injuries, that he would require necessary medical care in the future due to those injuries, and that he would reach MMI after a six-month period. Assuming without deciding that the trial court also implicitly found that Cummings did not willfully reject the recommended back surgery,[2] we hold that that implicit finding was not clearly erroneous.

Cummings was injured on December 16, 2004. Dr. Donovan, Cummings’s principal treating physician, first saw Cummings on December 27, 2004, for back, neck, and shoulder pain. Between then and January 6, 2005, Dr. Donovan saw Cummings twice.

In February 2005, Dr. Donovan operated on Cummings’s shoulder. Around October 21, 2005, Dr. Donovan sent Cummings to Dr. Tomaszek, although Cummings did not see Dr. Tomaszek until two months later. Dr. Tomaszek recommended neck surgery for Cummings on December 20, 2005. The same day, Dr. Donovan also recommended a partial diskectomy on Cummings’s lower back.

Cummings did not see Dr. Donovan between the December 20, 2005 evaluation and November 2006, although he did visit him in May or June of that year and again the week before trial in February 2008. However, during part of 2006, Cummings underwent conservative treatment, including physical therapy and two rounds of epidural steroid injections to his neck and lower back, the latter procedures having been ordered by Dr. Donovan.

In September 2007, Dr. Tomaszek performed Cummings’s neck surgery—five months before trial. Cummings did home exercises for his neck afterwards.

Cummings admitted at trial that the back surgery “ha[d] not [yet] happened.” However, he also testified that he still had problems with his lower back, which interfered with his bending, stooping, and lifting; that he felt that he needed the back surgery; and that, if the surgery were authorized that very day, “I would take it.”

Jimmy Robicheaux, the Diamond parties’ claims manager for Cummings’s case, admitted

● that he recalled Dr. Donovan’s June 2006 deposition testimony that Cummings needed lumbar surgery,



● that “shortly after” that June deposition the Diamond parties “received correspondence through [their] lawyers” from Cummings’s counsel “requesting that Diamond make arrangements so that Mr. Cummings could get that surgery,”[3] and



● that in February 2008, just before trial, “Dr. Donovan continue[d] to insist that Mr. Cummings needs that surgery.”



Nonetheless, as of June 2006, Dr. Donovan testified that the Diamond parties had not yet corresponded with him to advise that they were ready, willing, and able to pay for medical bills that Cummings had by then incurred. The Diamond parties point to no evidence that they advised Cummings or Dr. Donovan that they had agreed to pay the reasonable expenses of his surgery. And the trial court could reasonably have inferred that the Diamond parties had not authorized such surgery before trial because Robicheaux testified at trial that “right now” and “today” they were authorizing Cummings’s back surgery. Finally, Cummings testified that the neck surgery was not approved or authorized until July 2007, that the neck surgery occurred only two months after the Diamond parties approved it, that the only way that Dr. Tomaszek would perform that surgery was if he had a deposit, and that Cummings’s counsel paid that deposit on Cummings’s behalf. The Diamond parties point to no similar evidence that they approved reasonable expenses for back surgery for Cummings.

The above is some evidence to support any possible implicit finding that Cummings’s failure to have back surgery was “something less than a willful rejection,” see Coulter, 511 F.2d at 738, because between Dr. Tomaszek’s recommendation of surgery in December 2005 and trial (1) Cummings was at times undergoing other surgeries, conservative medical treatment, or independent medical examinations for his shoulder, neck, and back or (2) the Diamond parties had not authorized or guaranteed the reasonable costs of such surgery.

The Diamond parties counter that any contention that the back surgery did not occur because they refused to authorize it is unfounded because (1) they “had an absolute right to investigate [Cummings’s] claim for maintenance and cure and to obtain [his] medical records from the treating physicians that he selected”; (2) Cummings did not authorize Dr. Donovan to give them any medical records until after suit was filed; and (3) “against these facts, it is simply absurd to give any credence to [Cummings’s] self-serving testimony” that he would have the surgery if it were now authorized.

However, the Diamond parties admit that their counsel obtained Cummings’s medical records after suit was filed in February 2005, and Robicheaux testified that Cummings’s authorization for medical records was served on the Diamond parties in early June 2005. Robicheaux admitted that whatever discovery was obtained by the Diamond parties’ counsel would have been maintained in his file and that he would have reviewed it. Therefore, by their own admission, the Diamond parties had received, by mid-2005, an authorization to obtain Cummings’s then-extent medical records. They do not explain how a delay of six months from their initial request for records would have hampered their investigation of Cummings’s need for back surgery, the need for which Dr. Donovan again conveyed to them in June 2006 and February 2008.

Finally, we generally defer to the fact finder’s credibility determinations, such as the trial court’s implicitly finding credible Cummings’s testimony that he would have the surgery. See, e.g., Exxon Co. v. Sofec, Inc., 54 F.3d 570, 576 (9th Cir. 1995) (“Special deference is paid to a trial court’s credibility findings.”), aff’d on other grounds, 517 U.S. 830, 116 S. Ct. 1813 (1996).

We overrule issue one.

C. Declaration of MMI

In issue two, the Diamond parties argue that the trial court erred in declaring a future MMI date.

Dr. Donovan twice testified by deposition, without contradicting expert testimony,[4] that he anticipated that Cummings would reach MMI six months after he had the surgeries to his neck and his lower back. The doctor also testified that he thought that Cummings’s “prognosis” would be “very good” if Cummings had the neck and back surgery because Cummings “is a motivated man . . . a young man, and we can get him back with some kind of work, sure.” Although the doctor also testified that the “worst case scenario” would be that Cummings “just never gets better and becomes a chronic-pain patient,” the trial court would not have clearly erred in discounting this last bit of testimony, i.e., the court could reasonably have concluded that the doctor did not anticipate that the worst case scenario would occur, based on his other testimony, which was phrased in terms of the doctor’s anticipation and the patient’s prognosis. This evidence supports the trial court’s determination that MMI would be reached in six months.

The Diamond parties nonetheless argue that the trial court clearly erred. First, they note that the conclusions in the report of the independent medical examination conducted by a Dr. Wood as to the condition of Cummings’s spine and the efficaciousness of surgery conflicted with those of Dr. Donovan; they further contend that Dr. Donovan’s own conclusions were not unequivocal because he gave best- and worst-case scenarios for Cummings’s recovery. They then indicate that the medical determination of MMI must be unequivocal for a finding based on it to stand.

This is not what the law cited by the Diamond parties provides, however. Rather, those cases provide that a medical determination to terminate a seaman’s right to maintenance and cure must be unequivocal. See Johnson v. Marlin Drilling Co., 893 F.2d 77, 79 (5th Cir. 1990); Tullos v. Res. Drilling, Inc., 750 F.2d 380, 388 (5th Cir. 1985). This rule of law accords with the Supreme Court’s mandate that “[w]hen there are ambiguities or doubts [concerning maintenance and cure], they are resolved in favor of the seaman” because seamen are wards of the courts. See Vaughan, 369 U.S. at 532, 82 S. Ct. at 1000. However, when a fact finder in an admiralty case is faced with conflicting medical evidence of a seaman’s medical condition, the fact finder must resolve that conflict with an eye toward the mandate that ambiguities or doubts are to be resolved in favor of maintenance and cure. See Mar. Overseas Corp. v. Waiters, 923 S.W.2d 36, 41 (Tex. App.—Houston [1st Dist.] 1995) (“Because of this rule [in Vaughn to resolve doubts in favor of seaman in maintenance-and-cure case], when the opinions of doctors are in conflict regarding the seaman’s condition, the court must resolve the conflict in favor of the seaman’s right to maintenance and cure.”), mod’d on other grounds & aff’d as modified, 917 S.W.2d 17 (Tex. 1996). If the Diamond parties were correct in their position, then fact finders could never award maintenance or cure when medical testimony conflicted, despite the mandate in Vaughn. This is not the law.

We overrule issue two.

D. Prepayment of Maintenance and Cure & Surgery’s Possibility

In part of issue three, the Diamond parties argue that the trial court clearly erred in awarding a lump-sum payment for future maintenance and cure. Specifically, they contend that (1) the law does not require them to prepay maintenance and cure in a lump sum and (2) even if it does, a lump sum for future maintenance and cure could not be awarded here because Cummings’s surgery is only a mere possibility.

The Supreme Court has observed that “[t]he award of a lump sum in anticipation of a continuing need of maintenance and cure for life or an indefinite period is without support in judicial decision.” Calmar S.S. Corp. v. Taylor, 303 U.S. 525, 530, 58 S. Ct. 651, 654 (1938) (emphasis added); accord Farrell v. United States, 336 U.S. 511, 519, 69 S. Ct. 707, 711 (1949) (“But maintenance and cure is more certain if more limited in its benefits. It does not hold a ship to permanent liability for a pension, neither does it give a lump-sum payment to offset disability based on some conception of expectancy of life.”) (emphasis added). However, the Supreme Court has also observed that “[a]wards of small amounts to cover future maintenance and cure of a kind and for a period definitely ascertained or ascertainable have occasionally been made.” Calmar at 530-31, 58 S. Ct. at 654 (emphasis added). Courts relying on Calmar have generally recognized that although lump-sum awards for maintenance and cure are ordinarily not made, lump-sum awards may be made for future maintenance and cure of the limited and ascertainable type described in Calmar. See, e.g., Pelotto v. L&N Towing Co., 604 F.2d 396, 401 (5th Cir. 1979). The Texas Supreme Court has also applied this holding of Calmar. See Aderhold, 240 S.W.2d at 758 (“Defendant argues that our discussion of maintenance is in conflict with Calmar . . . in providing for future maintenance. We do not so construe it. The plaintiff is limited by a finding of the definite time at which he will obtain his maximum cure. What we have said is consistent with the Calmar case.”); see also Premeaux v. Socony-Vaccuum Oil Co., 192 S.W.2d 138, 142 (Tex. 1946) (quoting Calmar’s pertinent holding in dictum).

In this case, the trial court found that Cummings would reach MMI after six months, which the court calculated from the date of trial. As discussed before, the trial court could reasonably have credited Dr. Donovan’s testimony that he believed that Cummings would reach MMI six months after his last surgery. The Diamond parties do not contest the finding that the maintenance rate was $25 per day. Applying both of these findings, the trial court concluded that Cummings was entitled to $4,500 in future maintenance. And based on its further findings that Cummings would in reasonable probability incur future medical expenses for his injuries and that he would require necessary future medical care, the trial court concluded that Cummings was entitled to future cure of $112,500, which conformed to Dr. Donovan’s estimates for costs of surgery, medication, and rehabilitation.[5] There was evidence that Cummings needed the lower-back surgery and that it was the sole remaining recommended surgery for his injuries, and Cummings testified that he would have the surgery if it was authorized.

On this evidence, the trial court did not clearly err in implicitly concluding that a lump-sum award of future maintenance for this fixed period, and of future cure for this one remaining procedure and subsequent rehabilitation, could be granted because they were “of a kind and for a period definitely ascertained or ascertainable.” Calmar at 531, 58 S. Ct. at 654; see also Morales v. Garijak, Inc., 829 F.2d 1355, (5th Cir. 1987) (holding that award for future maintenance and cure was supported by physician’s testimony that surgery was necessary and would require five months of rehabilitation, and that second surgery might have to be redone if first surgery did not succeed, with worst-case scenario of 1.5 years of treatment and recuperation; modifying judgment to award same until MMI was achieved, as it was impossible to fix precise date of MMI); Lirette v. K&B Boat Rentals, Inc., 579 F.2d 968, 969 (5th Cir. 1978) (affirming summary judgment awarding future maintenance and cure to claimant “until he has reached maximum cure,” concluding that judgment did not contravene Calmar); Pallis v. United States, No. 09-40088, 2010 WL 785171, at *7 (5th Cir. Mar. 9, 2010) (not designated for publication) (holding that trial court clearly erred in denying future maintenance because, in having found that claimant would incur future medical expenses for physical therapy and knee replacement surgery, the court “implied a definite period of time for the completion of that treatment” under Calmar and progeny, so that failure to award future maintenance was error).

The cases cited by the Diamond parties are factually distinguishable or did not involve awards of future maintenance or cure in lump sum.[6]

The Diamond parties further respond that Cummings could not be awarded a lump sum because seamen have the right to bring serial suits to collect maintenance and cure as it comes due. See, e.g., Prude, 769 S.W.2d at 665; see also Pelotto, 604 F.2d at 401 (recognizing that res judicata will not bar such subsequent suits). However, just because a seaman may bring serial suits to collect cure payments as they come due does not mean that he always must do so, rather than seeking a future maintenance or cure in a single suit under appropriate circumstances, or that that means is his exclusive remedy. See Lirette, 579 F.2d at 970 (rejecting defendant’s argument that serial-suit right is exclusive remedy of seaman, and affirming judgment for future maintenance “until [seaman] has reached maximum cure”). If that were a seaman’s sole remedy, then the Supreme Court would not have recognized an exception for lump-sum awards of future maintenance and cure “of a kind and for a period definitely ascertained or ascertainable.” E.g., Calmar 303 U.S. at 531, 58 S. Ct. at 654.

Likewise, the Diamond parties rely on Dominguez v. Marine Transport Management Co. for their related position that a shipowner has no obligation to prepay for medical tests or treatment. 1992 A.M.C. 2862, 2864 (E.D. La. 1992). The cited comment from Dominguez was mere dictum, and in it, the court stated that it was “unable to find a single precedent requiring that the maritime employer guarantee to pay for tests” before they are done. Id. This position is not universally held. See Sullivan v. Tropical Tuna, Inc., 963 F. Supp. 42, 45 (D. Mass. 1997) (disagreeing with Dominguez court’s dictum and holding, “In light of the realities of the current health care system, this Court observes that an injured seaman often will be unable to obtain necessary medical treatment unless he can first demonstrate the ability to pay. As a result, the Court holds that a shipowner’s duty to pay maintenance and cure encompasses a duty to guarantee payment prior to treatment for all reasonable medical expenses. This ruling appropriately upholds the principle set forth in Vaughan v. Atkinson . . . .”); Weeks Marine, Inc. v. Bowman, No. 04-0009, 2006 WL 2178514, at *2 (E.D. La. July 28, 2006) (not designated for publication) (adopting Sullivan court’s holding); Gorum v. Ensco Offshore Co., Nos. Civ. A. 02-2030, Civ. A. 02-2031, 2002 WL 31528460, at *10 (E.D. La. Nov. 14, 2002) (not designated for publication) (same); see also Eldridge v. Star Line, No. 07-14810, 2009 WL 1513991, at *1 (E.D. Mich. May 29, 2009) (not designated for publication). In any event, the issue before us is whether future cure may be awarded in a lump sum, and the Supreme Court has clearly indicated that it can be, under the appropriate circumstances. See Calmar 303 U.S. at 531, 58 S. Ct. at 654.

We overrule this portion of issue three.

E. Amount of Cure Awarded

In the remainder of issue three, the Diamond parties contend that Dr. Donovan’s estimates of reasonable and necessary costs for future medical care were based on assumptions that were “no longer accurate at the time of trial” because they included estimated costs for neck surgery. The neck surgery had not taken place when Dr. Donovan was deposed, but it had been performed by the time of trial, and the Diamond parties either had paid for it or had stipulated to indemnify Cummings for it before trial. The Diamond parties pray that the judgment be reversed for that reason, among others. We interpret this as an argument that the trial court committed clear error in implicitly finding that the cost of future cure was $112,500, the amount of cure that the court concluded Cummings should be awarded. This clear-error argument is akin to a factual-sufficiency challenge that the dollar amount awarded was excessive. Cf. Ellis, 971 S.W.2d at 406 (“The standard of review for an excessive damages complaint is factual sufficiency of the evidence.”).

By the time of trial, Cummings had had his neck surgery and had recovered from it, and the trial court found that “no past medical expense or past cure obligation is owed by [the Diamond parties] due to the stipulation at trial to indemnify Cummings for these bills.” The only remaining recommended surgery at the time of trial was the surgery to Cummings’s lower back, including medication and rehabilitation related to it. The estimate of future cure expenses in Dr. Donovan’s June 2006 deposition testimony, which predated the neck surgery, clearly included costs related to both the neck and back surgeries.

The trial court entered no findings of fact as to how it reached the total sum that it awarded for future cure, and the Diamond parties did not request additional findings of fact,[7] but the only evidence of the amount of future medical expenses came from Dr. Donovan’s deposition testimony, which does not support the full amount awarded for the sole recommended surgery that remained. See Tex. R. Civ. P. 299 (“[B]ut when one or more elements [of a claim or defense] have been found by the trial court, omitted unrequested elements, when supported by evidence, will be supplied by presumption in support of the judgment.”) (emphasis added). The Diamond parties did not make this excessive-cure-award argument below, but they did not have to because trial was to the court. Cf. Tex. R. App. P. 33.1(d) (“In a nonjury case, a complaint regarding the . . . factual insufficiency of the evidence—including a complaint that the damages found by the court are excessive or inadequate, as distinguished from a complaint that the trial court erred in refusing to amend a fact finding or to make an additional finding of fact—may be made for the first time on appeal in the complaining party’s brief.”).

Many of the costs related to the back surgery expressed in Dr. Donovan’s testimony can be separated from costs related to the neck surgery, but some—specifically, those for work conditioning, work hardening, and chronic pain management ($70,000 total)—cannot because the doctor’s testimony did not segregate them between surgeries. On this record, the trial court clearly erred in concluding that the amount of future cure for the one remaining surgery and its related costs was $112,500.

We sustain this final portion of issue three.

* * *

See: http://www.1stcoa.courts.state.tx.us/opinions/htmlopinion.asp?OpinionId=87724

Outcome: We affirm that portion of the judgment awarding maintenance and declaring the date of MMI. See Tex. R. App. P. 44.1(b). We reverse that portion of the judgment awarding cure. See id. The remainder of the judgment remains intact. We remand the case for further proceedings not inconsistent with this opinion.

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