Magee v. Ensco Offshore Company
Filing
82
ORDER granting 70 Motion for Summary Judgment to Enforce Settlement Agreement; FURTHER ORDERED that ENSCO Offshore Co. shall immediately pay 69,257.95 (6, 959.53 plus 3, 298.42) to Diagnostic Management Affiliates PPO, LLC. FURTHER ORDERED that ENSCO Offshore Co. shall immediately pay 10,000 to Plaintiff's counsel, John Munoz. FURTHER ORDERED that ENSCO Offshore Co. shall immediately pay 50,000 to Plaintiff. Signed by Judge Carl Barbier on 5/30/13. (sek, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
MAGEE
CIVIL ACTION
VERSUS
NO: 11-1351
ENSCO OFFSHORE CO.
SECTION: "J” (2)
ORDER AND REASONS
Before the Court are Plaintiff’s Motion for Summary Judgment
to
Enforce
Settlement
Agreement
(Rec.
Doc.
70),
Defendant’s
opposition thereto (Rec. Doc. 72), Plaintiff’s reply to same
(Rec.
Doc.
Plaintiff’s
77),
and
Defendant’s
surreply
(Rec.
Doc.
81).
motion was set for hearing on April 10, 2013, on the
briefs. The Court, having considered the motion and memoranda of
counsel,
the
record,
and
the
applicable
law,
finds
that
Plaintiff’s motion should be GRANTED for the reasons set forth
more fully below.
PROCEDURAL HISTORY AND BACKGROUND FACTS
This
suit
arises
out
of
maintenance
and
cure
and
unseaworthiness claims that were brought under the Jones Act and
general
maritime
law.
Plaintiff,
1
Kendall
Magee,
filed
his
Complaint in this Court on June 8, 2011, naming his employer,
ENSCO Offshore Company (“ENSCO”), and the owner and operator of
the M/V MS. CHRISTINE, Tobias Inc., as Defendants. Plaintiff
asserts that he sustained injuries to his lower back when he fell
on the M/V MS. CHRISTINE during the offloading process.
On January 7, 2013, the parties participated in a mediation
which
resulted
in
the
settlement
of
this
case.
Following
mediation, a dispute arose between Plaintiff and ENSCO about the
payment of certain medical bills that were incurred by Plaintiff
and
paid
(“DMA”).
by
Diagnostic
Specifically,
$65,959.53
surgery
for
worth
of
associated
the
costs
with
Management
disputed
for
Affiliates
medical
hospitalization,
Plaintiff’s
low
back.
bills
PPO,
concern
testing,
Pl.’s
LLC
Mem.
and
in
Supp., Rec. Doc. 70-1, p. 5. Likewise, Plaintiff’s counsel paid
$10,000 to DMA as a deposit for
Plaintiff to receive these
services. Pl.’s Mem. in Supp., Rec. Doc. 70-1, p. 5. ENSCO has
refused to pay DMA the full amount due because it believes that
some of these charges are outside the scope of the parties’
settlement agreement.1 In particular, ENSCO notes that while the
1
The full amount due is $69,599.53 due to DMA and $10,000 due to
Plaintiff’s attorney for a down payment that he paid to DMA. Ex. 13 to Pl.’s
Mot., Rec. Doc. 70-14, p. 2. The additional $3,298.42 included in this amount
comes from a service fee charged by DMA. DMA had agreed to waive this fee if the
full amount of the bill was paid by February. Plaintiff asserts that because it
is ENSCO’s own delay which has caused this fee to accrue, it should be ENSCO’s
2
medical
providers
have
billed
for
$75,959.53,
DMA,
through
various agreements that it has with the providers, was able to
obtain the services at a discounted rate. Thus, ENSCO asserts
that under the terms of the settlement, it should only have to
reimburse the actual sums that DMA paid to the medical providers.
It contends that it should not have to pay the additional amount
that was billed because such amount
merely represents a profit
for DMA and not a “reasonable” medical expense.
this
dispute,
Plaintiff
has
refused
to
As a result of
accept
any
partial
payments of these funds by ENSCO. Plaintiff has also refused to
accept a
full payment of a separate amount ($50,000) that ENSCO
owes directly to Plaintiff under the settlement agreement. The
pertinent written terms of the settlement are as follows:
For and in consideration of the settlement, release,
and dismissal of any and all claims with prejudice,
Plaintiff will accept, and Defendants will pay, the
sums
of
ENSCO
OFFSHORE
COMPANY
fifty
thousand
and
No/100 . . . . Settlement to be funded within best
efforts within 14 days of this date. . . .
responsibility to pay the fee. Accordingly, the total amount due is: $65,959.53
(to DMA for medical services) plus $10,000 (to Plaintiff’s counsel for deposit
paid to DMA) which equals the total $75,959.53 medical bill in question.
Additionally, Plaintiff seeks an addition $3,298.42 to cover a DMA service fee.
3
Ensco agrees to assume responsibility for all low back
related
cure.
Maintenance
and
cure
shall
terminate
today. Plaintiff agrees to not seek reemployment with
Ensco.
.
.
.
Ensco
agrees
to
reimburse
plaintiffs
counsel for any amount paid for cure expenses related
to the low back within the same period of time upon
receipt of cancelled checks or other proof of payment.
Pl.’s Ex. 12 to Mot., Rec. Doc. 70-13, p. 1.
Plaintiff filed the instant motion seeking enforcement of
the settlement on March 21, 2013. Defendant replied in opposition
on April 3, 2013. Plaintiff filed a reply thereto on April 10,
2013, with Defendant filing a surreply on April 12, 2013.
THE PARTIES’ ARGUMENTS
In addition to the aforementioned arguments, the parties
also make the following contentions. Plaintiff argues that under
the terms of the settlement agreement, ENSCO must pay the full
amount billed by DMA. Plaintiff contends that the maximum cost of
all low back treatment was disclosed to ENSCO before settlement
4
and at the mediation.2 Plaintiff asserts that ENSCO knew that
information and still agreed to undertake payment of all low back
related cure without making any reservations. Thus, Plaintiff
requests
that
settlement
this
agreement
Court
and
order
to
pay
ENSCO
the
to
full
comply
amount
with
the
the
DMA
of
medical bill. Likewise, Plaintiff also notes that because of
ENSCO’s dilatory actions, DMA has charged Plaintiff an additional
$3,298.42 fee. Plaintiff requests that ENSCO also be required to
pay this fee.
ENSCO argues that Plaintiff does not have a cause of action
against
ENSCO
Specifically,
with
ENSCO
respect
contends
to
the
that
disputed
in
medical
Plaintiff’s
bills.
original
contract with DMA, Plaintiff assigned all of his rights and
interests in payment of the medical bills to DMA. Thus, ENSCO
asserts that this Court should deny Plaintiff’s action and let
ENSCO continue to negotiate with DMA for the payments. Second,
ENSCO argues that if Plaintiff had disclosed the DMA mark-ups to
ENSCO before the mediation, it would not have agreed to pay them.
Thus, ENSCO argues that there was no meeting of the minds because
2
Plaintiff specifically notes that at the mediation it presented ENSCO
with a “detailed MEDICAL COST CHART with attached medical bills.” Pl.’s Mem. in
Supp., Rec. Doc. 70-1, p. 4. Plaintiff asserts that this chart included the
disputed costs and that ENSCO was privy to it before signing the settlement
agreement. Pl.’s Mem. in Supp., Rec. Doc. 70-1, pp. 4-5.
5
Plaintiff withheld material information from it. Likewise, ENSCO
argues that any mark-ups by DMA cannot be characterized as a
medical expense or as cure because they are not “reasonable” or
“necessary” medical expenses.
DISCUSSION
"Federal
agreements
courts
entered
possess
into
in
the
inherent
settlement
of
power
to
enforce
litigation
pending
before them." Smith v. Ford Motor Co., No. 98-2299, 1999 WL
649636, at *2 (E.D. La. Aug. 24, 1999) (citing Eastern Energy,
Inc.
v.
Unico
Oil
&
Gas,
Inc.,
861
F.2d
1379,
1380
(5th
Cir.1988)). Where a federal court has dismissed a case, it may
enforce a settlement agreement via its ancillary jurisdiction as
long as its dismissal order specifically provides for enforcement
of the settlement. Hospitality House v. Gilbert, 298 F.3d 424,
430 (5th Cir. 2002) (citing Kokkonen v. Guardian Life Ins. Co.,
511 U.S. 375, 378-81 (1994)). In the instant case, Plaintiff
filed his motion to enforce the settlement before the Court's
jurisdiction over the settlement expired; therefore, this motion
is properly before the Court, and the Court may enforce the
settlement at issue.3 “Questions regarding the enforceability or
3
This Court issued a sixty day dismissal order on January 15, 2013, which
retained jurisdiction for the purposes of enforcing the settlement for a period
of sixty days. January 15, 2013 Order Dismissing Case, Rec. Doc. 67. On March 6,
2013, Plaintiff filed a motion requesting that this Court extend its jurisdiction
6
validity of [settlement] agreements are determined by federal
law—at least where the substantive rights and liabilities of the
parties derive from federal law. Mid-South Towing Co. v. Har-Win,
Inc., 733 F.2d 386, 389 (5th Cir. 1984) (citing Fulgence v. J.
Ray McDermott & Co., 662 F.2d 1207 (5th Cir.1981)). Because the
claims before the Court are brought under general maritime law,
the Court applies federal maritime law to interpret and enforce
the settlement agreement.
When interpreting a contract under general maritime law, the
“court may not look beyond the written language of the document
to
determine
the
intent
of
the
parties
unless
the
disputed
contract provision is ambiguous.” Corbitt v. Diamond M. Drilling
Co., 654 F.2d 329, 332-33 (5th Cir. 1981) (citing Hicks v. Ocean
Drilling and Exploration Co., 512 F.2d 817, 825 (5th Cir. 1975)).
The “basic principle of contract interpretation in [maritime] law
is to interpret, to the extent possible, all the terms in a
contract
without
rendering
any
of
them
meaningless
or
superfluous.” Chembulk Trading LLC v. Chemex Ltd., 393 F.3d 550,
555 (5th Cir. 2004) (citing Foster Wheeler Energy Corp. v. An
for an additional thirty days. Pl.’s Mot. for Ext. Deadlines, Rec. Doc. 68. The
motion was unopposed and this Court granted it on March 8, 2013. March 8, 2013
Order,
Rec. Doc. 69. Plaintiff filed the instant Motion to Enforce the
Settlement on March 21, 2013, well within the Court’s extended period of
jurisdiction over the settlement.
7
Ning Jiang MV, 383 F.3d 349, 354 (5th Cir.2004)). Words in a
contract
are
given
their
plain
meaning
as
understood
by
a
reasonable person. Sander v. Alexander Richardson Inv.’s, 334
F.3d 712, 716 (8th Cir. 2003).
In the instant case, the plain language of the contract
provides that ENSCO will “assume responsibility for all low back
related cure.” Pl.’s Ex. 12 to Mot., Rec. Doc. 70-13, p. 1.
“Cure” is generally defined as “the employer’s obligation to pay
for medical expenses for sick or injured seaman.” 1 Thomas J.
Schoenbaum, Admiralty and Maritime Law § 6-32, at 522 (5th ed.
2011); Matter of Cooper/T. Smith Stevedoring Co., Inc., 942 F.
Supp. 267, 269 (E.D. La. 1996) (defining cure as a seaman’s right
to necessary medical expenses). An employer does not have to pay
for
medical
expenses
when
they
are
“overly
expensive,”
“unnecessary,” or “excessive.” Matter of Cooper, 942 F. Supp. at
269-70. Such expenses must be reasonable. Id. Thus, as written,
the settlement agreement indicates that the parties intended for
ENSCO
to
assume
responsibility
for
all
low
back
related
‘necessary medical expenses.’ As such, the question before this
Court is: do the disputed medical bills constitute ‘necessary
medical expenses’? This Court finds that they do.
The Court makes this determination based on the following.
8
First,
the
incurred
by
disputed
expenses
Plaintiff
at
are
the
expenses
time
of
that
the
were
already
settlement
and,
moreover, ENSCO was aware that it might be responsible for the
full amount of these expenses—$75,959.53—at the time that it
signed the settlement agreement.4 Therefore, if ENSCO was truly
concerned about its ability to negotiate these costs down to what
it deemed to be a “reasonable” price, it could have provided for
that in the agreement.
Second, while ENSCO makes much ado about the fact that it
was not aware of DMA’s role in the payment process, the Court
does not find that ENSCO’s lack of knowledge was material to the
negotiation of the settlement agreement. As has been noted, ENSCO
was fully aware of the maximum amount of medical expenses that it
would have to pay at the time that the settlement was negotiated.
Thus, when ENSCO later learned that it would be paying those
expenses to DMA rather than to the individual provider, there was
no material change. ENSCO still owed the same amount of money
that it agreed to pay at the time of the settlement, it simply
owed the payment to a different entity.
4
While ENSCO has disputed that it was not aware of the arrangement with
DMA, it has not disputed Plaintiff’s assertion that ENSCO was presented with the
MEDICAL COST CHART at the mediation, which outlined all of the medical expenses
that Plaintiff had incurred. The MEDICAL COST CHART listed the then current
disputed expenses. See Ex. 11 to Pl.’s Mot., Rec. Doc. 70-12.
9
Third, and most importantly, Plaintiff was only able to
obtain the disputed medical services by contracting with DMA for
their
payment.
Pl.’s
Mem.
in
Supp.,
Rec.
Doc.
70-1,
p.
3
(“Accordingly, in order to obtain the recommended testing and
treatment, plaintiff contracted with [DMA].”). Thus, it appears
that the amounts DMA billed Plaintiff are both reasonable and
necessary. The record reflects that after Plaintiff sustained his
injuries he required medical care. Pl.’s Ex.’s 1, 2, 3, & 5 to
Mot., Rec. Docs. 70-2 to70-4, 70-5.
ENSCO refused to pay for
Plaintiff’s medical care. Pl.’s Ex. 7 to Mot., Rec. Doc. 70-8. As
a result, Plaintiff entered into an agreement with DMA by which
DMA would provide the Plaintiff with the necessary medical care.
The agreement provided that Plaintiff would have to repay the
costs associated with testing and surgery to DMA.5 DMA was then
able to obtain Plaintiff’s medical care at reduced rates. Ex. 10
to Pl.’s Mot., Rec. Doc. 70-11. As a result, Plaintiff obtained
5
Pl.’s Mem. in Supp., Rec. Doc. 70-1, p. 4 (“The costs associated with the
testing and surgery were subsequently paid by DMA, and plaintiff has agreed to
repay these costs from any proceeds recovered through the litigation.”); Ex. 10
to Pl.’s Mot., Rec. Doc. 70-11 (“I understand and agree that I will pay DMA the
full customary and usual charges of DMA’s healthcare providers and that the
difference between what I pay DMA and what DMA pays its providers is DMA’s
income.”). The Court also notes that because Plaintiff has agreed to repay these
costs, regardless of any negotiations between DMA and ENSCO, Plaintiff will
ultimately bare the burden of paying any fees to DMA if ENSCO does not. Thus,
the Court does not find that ENSCO’s assignment argument is valid — Plaintiff has
a tangible interest in the amount that ENSCO pays to DMA, and Plaintiff is within
his right to bring a cause of action to enforce the agreement that he, not DMA,
entered into.
10
his medical care and has to pay for this care in the amount that
DMA charges—$75,959.53.6 Plaintiff could not have negotiated his
medical care for the lesser amounts that ENSCO seeks to pay now.7
Accordingly, the amount charged by DMA is the reasonable and
necessary
amount
of
cure
and
is
covered
by
the
settlement
agreement.8
Lastly, the Court also notes that it is ENSCO’s own dilatory
actions that have caused Plaintiff to incur a $3,298.42 service
fee
from
DMA.
As
such,
the
Court
finds
that
it
is
ENSCO’s
responsibility to pay that fee as well. The Court does not find
that an award of attorney’s fees and costs are appropriate in
this instance. For the forgoing reasons,
IT IS ORDERED that Plaintiff’s motion is GRANTED.
IT
IS
FURTHER
ORDERED
that
ENSCO
Offshore
Co.
shall
immediately pay $69,257.95 ($6, 959.53 + 3, 298.42) to Diagnostic
6
Technically, the total amount now charged to Plaintiff is $69,257.95
since $10,000 was already paid by Plaintiff’s attorney and is owed directly to
him.
7
The Court notes that if ENSCO had wanted to avoid higher costs, it could
have chosen to pay for Plaintiff’s medical expenses up-front, thereby allowing
it to negotiate costs at its own provider rates. Likewise, it could have
specifically chosen to limit the amount of cure in the settlement agreement to
its own negotiated rates.
8
This includes the $65,959.53 as well as the $10,000 fee incurred by
Plaintiff’s attorney. The Court notes that the settlement also plainly provided
that ENSCO would reimburse Plaintiff’s counsel for any cure expenses that counsel
incurred, i.e. the $10,000.
11
Management Affiliates PPO, LLC.
IT
IS
FURTHER
ORDERED
that
ENSCO
Offshore
Co.
shall
immediately pay $10,000 to Plaintiff’s counsel, John Munoz.
IT
IS
FURTHER
ORDERED
that
ENSCO
Offshore
Co.
immediately pay $50,000 to Plaintiff.
New Orleans, Louisiana this 30th day of May, 2013.
____________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
12
shall
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