In a recent case, Hale v. BAE Systems, BRB No. 17-0523 (October 10, 2018), the Benefits Review Board (BRB) affirmed the denial of death benefits under Section 33(g) of the Longshore & Harbor Workers’ Compensation Act (LHWCA).

Hale v. BAE Systems Background

The decedent (“Decedent”) worked as a ship-fitter and boilermaker for a number of shipyard employees. During the course of his employment, Decedent was allegedly exposed to asbestos and developed lung cancer. In 2007, Decedent filed suit in state court against a number of third party defendants. In August 2011, while the case was still pending, Decedent died. In April 2012, Decedent’s widow (“Widow”) executed a disclaimer renouncing her interest in the third party actions in favor of pursuing death benefits under the LHWCA; none of these disclaimers were filed with any court. In July 2012, the Widow filed for LHWCA death benefits.

Separately, in May 2012, the local circuit court appointed Decedent’s daughter (“Daughter”) as the successor-in-interest to Decedent in the third party suit. In July 2012, Daughter also filed a wrongful death claim against various third party defendants. Daughter subsequently executed settlements with two third parties: on May 17, 2012, Daughter executed a release in exchange for $2,000.00 that bound Decedent’s heirs as defined under California law. On April 30, 2014, Daughter executed an additional settlement for $7,000.00 that bound herself, Decedent’s estate, and Decedent’s heirs.

Employer Controverts Widow’s Death Benefits Pursuant to Section 33(g)

After learning of these two settlements, the Employer controverted Widow’s death benefits pursuant to Section 33(g) under the LHWCA, which bars future benefits for a claimant who settles with a third party without the express written consent of the employer/carrier. The sole issue at the hearing was whether or not Widow or someone with the authority to do so on her behalf  “entered into a settlement with a third person” as defined under Section 33(g).

The Administrative Law Judge (ALJ) held that 33(g) applied and barred further death benefits, finding that Daughter was authorized to, and, in fact did enter into a settlement with a third party. In looking at California law, the ALJ noted that, as the widow, Widow was the presumptive heir and that the releases that Daughter was authorized to execute included Decedent’s heirs.

Benefits Review Board Affirms the ALJ

The Benefits Review Board affirmed the ALJ at request of the employer and the Director, holding that the plain language of “entered into” under Section 33(g) meant to participate in or become a party to something. In examining the four corners of settlement agreement and interpreting the settlement agreement as a contract under California law, the BRB held that Widow was included as a party who entered into the release. The BRB rejected the assertion that Widow was entitled to parol evidence to prove that she was not a party that entered into the agreement vis-à-vis her previously executed disclaimers.