In what is believed to be a case of first impression, a jury in federal court in Illinois has awarded punitive damages against a Jones Act seaman and in favor of his employer, after the seaman pursued what was found to be a fraudulent claim. In Phillips v. Hunter Marine Transport, Inc., United States District Court for the Southern District of Illinois, Case No. 09-cv-0997-SCW (decision rendered 9/26/12), Forest Phillips, a deckhand, brought suit against his employer, Hunter Marine, under the Jones Act and the General Maritime Law, for personal injuries allegedly sustained in March 2009. When he reported for his 28 day work hitch, he signed a boarding report in which he denied having any physical or mental condition that might impair his ability to perform his job duties. After boarding the vessel, Phillips claims that he was injured while attempting to walk a kink out of a wire when a co-employee handled the wire and caused it to spin out of Phillips’ hand, striking him in the forearm or upper arm. Phillips continued to work but submitted an accident report to the company the following day. He was provided medical treatment but returned to the vessel on light duty and when he departed the vessel two days later, he stated on a departure form that it was a “scheduled relief”. Phillips ultimately underwent surgery for a cervical disc herniation. Hunter Marine paid maintenance, cure and supplemental wages for approximately 7 months, at a total cost of approximately $92,000.00.
Ultimately, another deckhand reported that Phillips had told him that, prior to his alleged onboard injury, he had hurt his arm and shoulder while working on his car at home and was going to get the company to pay for it; that he had falsely claimed to have been struck by a wire during his alleged accident; and even attempted to bribe the deckhand so that he would support Phillips’ story. Upon obtaining this information, the employer terminated all benefits and Phillips filed suit.
Hunter Marine filed a counter claim against Phillps seeking recovery of all monies it had paid, along with punitive damages, due to material misrepresentation and fraud. Hunter Marine requested a jury trial and the court ultimately bifurcated the claims and allowed the counter claim to be tried to a jury first. The jury found that Phillips had concealed or misrepresented information when he completed the boarding form and when he reported the on-the-job accident; that his concealment and misrepresentation was material to the employer’s decision allowing him to work and/or to pay benefits; that the concealment or misrepresentation was made with the intent to deceive; that the employer would not have paid benefits if they were aware of the concealment and/or misrepresentation; that the employer had been damaged; and that Phillips was liable for punitive damages of $5,000.00.
In addition to the testimony obtained from the co-workers, there was also evidence that the plaintiff had multiple prior convictions for crimes involving deceit and dishonesty, such as forging checks and providing false information concerning his identity to a police officer. After the jury returned a verdict in favor of Hunter Marine on the counter claims, the federal magistrate, who was considering Phillips’ claims against his employer, ruled in favor of the employer, dismissing all claims. This decision illustrates the potentially helpful nature of boarding and departure forms and an extension of remedies for punitive damages.