Seaman’s Oral Settlement Agreement Valid and Enforceable

Plaintiff, a seaman, injured his foot aboard a vessel owned by defendant. Plaintiff sought medical treatment and eventually had two toes amputated as well as his entire right foot and the lower part of his right leg, which was due to lack of circulation to the lower part of the leg stemming from diabetes. When asked if he was ever diagnosed or treated for diabetes in a pre-employment questionnaire by defendant, plaintiff specifically denied ever being diagnosed or treated for diabetes.

Plaintiff field suit against defendant based on negligence claims under the Jones Act, a claim for unseaworthiness, and the suit requested future maintenance and cure and damages for losing his toes. The Eastern District of Louisiana granted defendant’s Motion for Summary Judgment on the maintenance and cure issue relying upon the McCorpen defense, which relieves maritime employers of liability for maintenance and cure with respect to injuries to seamen who conceal pre-exiting medical conditions.

The week before trial on the remaining issues, the parties reached a settlement agreement for a gross payment to plaintiff of $90,000.00. The court held a hearing to put the settlement on the record, which plaintiff was permitted to attend by telephone due to his mobility issues. The judge specifically questioned plaintiff regarding his authorization, acceptance, and understanding of the terms and consequences of the settlement agreement. Plaintiff agreed, and the settlement documents were mailed to plaintiff for signature.

Upon receiving the settlement documents, plaintiff refused to sign the documents. Defendant moved for summary judgment to enforce the settlement, which plaintiff opposed maintaining he did not agree to settle his claims because he had not signed the settlement documents, he did not have a complete understanding of the settlement agreement, the District Court erroneously neglected to apply Local Rule 58.3A, and the prior summary judgment on the McCorpen defense was improper. The district court granted defendant’s Motion for Summary Judgment to enforce the settlement as valid.

Plaintiff appealed to the U.S. Fifth Circuit. Regarding the issue of whether plaintiff agreed to settle his claims, the Court held an oral agreement to settle a personal injury cause of action within the admiralty and maritime jurisdiction of the federal courts in enforceable and cannot be repudiated in the absence of a factual basis rendering it invalid. Plaintiff presented no evidence showing he did not agree to the settlement rendering it invalid and unenforceable. Regarding the plaintiff’s informed understanding of his rights and full appreciation of the consequences of the settlement, the Court held plaintiff accepted the settlement with a full appreciation of its terms and consequences, thus the district court did not err in enforcing it. Of note, plaintiff took issue with the amount he would net from the settlement proceeds once attorney’s fees and costs were deducted, $25,000.00, which he claimed he was not properly advised and the amount was not enough to compensate him for losing his toes. The Court disagreed, finding plaintiff’s actions did not amount to incompetence that would call into question the validity of the settlement. Finally, the Court briefly addressed the last two issues holding the Eastern District of Louisiana Local Rule 58.3A was inapplicable because the settlement was not a joint stipulation of compromise, and the McCorpen defense issue was not relevant as it was adjudicated via summary judgment ruling prior to settlement.

Plaintiff was ordered to sign the settlement documents, and its terms were enforced to the fullest extent allowed by the agreement.

Hardison v. Abdon Callais Offshore, L.L.C., No. 12-31237 (5th Cir. Dec. 18, 2013).