Miami Jury Finds Rolls-Royce Committed Fraud Against Carnival Cruise Lines in Pod Litigation
Fowler Rodriguez obtained a $24 million verdict for Carnival Cruise Lines against Rolls-Royce. Rolls-Royce was found guilty of fraud by a unanimous jury. Rolls-Royce marketed its Mermaid pod propulsion system to Carnival for operation on their largest and most prestigious ship, the Queen Mary II. The jury found that at the time Rolls-Royce presented its pod to Carnival, Rolls-Royce knew the pod was defective and not fully developed.
George J. Fowler, III argued Rolls-Royce rushed into the market to defeat their competitors and sold an untested product that failed throughout the cruise industry. Furthermore, Fowler argued Rolls-Royce made money not only on the sales of the pods, but each time the bearings on the pods had to be replaced. He argued Rolls-Royce refused to pay for any of the replacement costs and made money off the repairs, which forced Carnival to file suit.
In his opening statement, Fowler expressed surprise as to why Rolls-Royce would allow this matter to go to trial. When the case was over, the judge and jury echoed Fowler’s initial concerns. U.S. District Judge Patricia Seitz said the jurors asked her why the case ever went to trial. “The first question they had was why didn’t these people settle when they have to work together,”. Judge Seitz also stated that she saw the trial possibly as a “bellweather for lawsuits” filed by other cruise lines that also found fault with Rolls-Royce’s pod system.
At trial, Rolls-Royce argued that problems with Carnival’s propulsion system were isolated incidents and that the Mermaid pods were not faulty. However, Carnival demonstrated that four sets of bearings were replaced on four pods from 2003 to 2008. A Carnival witness testified that the pod was so poorly engineered that the bearings could be made out of kryptonite and still be rendered useless. Rolls-Royce also argued that Carnival knew they were purchasing a risky, developmental product when they purchased the Mermaid pods.
Micky Arison, the Chairman of Carnival Corporation, testified at trial that the notion that he would take a risk on one of his company’s most prestigious ships was ludicrous. He had trusted and relied on Rolls-Royce’s assertions that the pods were going to function properly; he said he took people at their word and did his business deals “on a handshake.” When asked by Rolls-Royce counsel, the well-known criminal lawyer, Roy Black, whether he considered himself a “shrewd” businessman, Arison made the courtroom chuckle. He responded that he preferred to be considered a good scout of basketball talent, alluding to his successfull recruitment of LeBron James to his winning Miami Heat basketball team.
Arnaldo Perez, Carnival Corporation’s General Counsel, explained that
Carnival had trusted in the Rolls-Royce brand and its claim that the Mermaid pod was a “proven, well-tested product.” This highly contentious case took nearly three weeks to try. Fowler and Black each took two hours for their closing arguments.
Antonio J. Rodriguez said, “We are very pleased with the jury and their decision. This was an important case for Carnival, and it was made possible by the firm personnel from multiple offices functioning as one team.” Mary I. Hoelle, Frank C. Quesada, and Michael A. Rosen, from the firm’s Miami office, acted as trial attorneys in support of the firm’s counsel from New Orleans, Messrs. Fowler and Rodriguez. The legal support team also included attorneys A.T. Chenault, Michael Harowski, Cristi Fowler Chauvin, Sara E. T. Weber, and Thomas Oppenheimer.
Flint Wins for Ensco Offshore Company
It was ten days before Christmas and trial attorney Delos “Dee” Flint and associate Jacob Gardner sat in Federal Court waiting for a verdict. At 6:00 p.m., a jury of three wise men and four equally wise women re-entered the courtroom and returned a defense verdict in favor of Ensco Offshore Company, sending a plaintiff seeking $3 Million home to Pensacola, Florida empty-handed.
John Chapman, an electrician with 17 years experience both onshore and offshore , filed a suit against Ensco Offshore Company alleging Jones Act negligence, unseaworthiness and that he was owed additional maintenance. Chapman was injured as he disconnected a manifold gauge from a semi-submersible’s air-conditioning system and sustained severe Freon burns to the backside of both hands. Mr. Chapman rehabbed for close to a year and made over 150 visits to the physical therapists at the Andrews Institute (operated by noted orthopedic surgeon, Dr. James Andrews) in Gulf Breeze and Pensacola, Florida. A Functional Capacity Evaluation was conducted at the end of his rehabilitation, and he was released to return to medium to heavy level work. Mr. Chapman alleged that he was negligently trained, that he wasn’t provided a safe place to work and that the rig’s equipment was deficient in that the air conditioning system did not have Schraeder valves in all of the service ports. As a result of his injuries, Chapman alleged he could not return to work as an electrician.
Ensco countered that it had a Safe System of Work in place, which provided job safety analyses and work instructions and that the plaintiff ignored the safety precautions that were designed to prevent him from getting injured. Furthermore, he was injured when he performed a job which he was not assigned to do. The case was tried for three days before the Honorable Judge Jay Zainey in the United States District Court for the Eastern District of Louisiana. Late in the evening on December 15, 2010, the seven person jury returned a verdict finding that there was no Jones Act negligence, the rig was seaworthy and that no additional maintenance was owed to the plaintiff. Essentially, the jury found that the plaintiff failed to follow the safety rules that were in place and that he, and he alone, caused his injuries. Implicitly, the jury also found that the plaintiff, despite having a physical handicap as a result of the injury, could return to gainful employment.
At trial, the plaintiff’s co-workers, including his immediate supervisor, testified about the job to be performed and the nature of the work the plaintiff was involved in at the time of his injury.
Julie Slocum, Manager of Risk Management, testified on behalf of Ensco with respect to post accident rehabilitation and maintenance and cure issues. Rusty Fox, a rig manager based in Houston, Texas, testified concerning the Ensco Safe System of Work and the various checks and balances that now exist to ensure employees’ safety onboard semi-submersibles.
In addition to assistance from Jacob Gardner, new associate Andy Brown, paralegal Pat Bridges and secretary Linda Becnel assisted in the trial preparations which led to a successful outcome at trial.
Motion Victories Lead to Favorable Settlement in Construction Contract Dispute
In Seaward Marine Services, Inc. v. Grillot Construction, LLC et al, C.A. 08 cv 587, U.S.D.C - SDMS., Fowler Rodriguez obtained favorable rulings on key motions, which lead to a settlement and significant recoveries for Grillot Construction, Inc., and its co-plaintiff, Seward Marine Services, Inc. The case was litigated primarily by Edward “Bret” LeBreton, Todd Crawford, and Stuart Ponder.
Beau Rivage hired Grillot as its general contractor to perform a variety of maintenance and repair operations on the barges supporting its casino in Biloxi, Mississippi, including underwater painting, removal of marine growth and dredging. Grillot hired Seaward Marine as its subcontractor to assist with removal of growth and debris from the barges. When a dispute arose concerning what work was included in the bid and what would cost extra, Seaward filed suit against Beau Rivage and Grillot.
The firm’s attorneys first negotiated a settlement between Seaward and Grillot and then began prosecuting their claims jointly against Beau Rivage. Beau Rivage counter-claimed against Grillot alleging breach of contract, fraud, misrepresentation and failure to pay sales taxes.
The court granted motions brought by FR dismissing Beau Rivage’s claims based on alleged inconsistent terms in the general and subcontracts regarding debris, day rates, per diems and applicable law; failure to pay sales tax; overestimating the amount of debris and growth on the barges; waiver and settlement and attorneys fees.
The court also denied Beau Rivage’s motions based on: alleged failure to remove dredge spoils; whether unexpected debris and extra painting were included in the bid price or extras; premature billing for painting; alleged fraud in relation to a disposal subcontract and certain pay applications; negligent misrepresentation; and breach of contract.
While the court dismissed Grillot’s claim for quantum meruit, it denied Beau Rivage’s motion to dismiss claims for unjust enrichment. Following the rulings, the parties settled.
Jason Savarese v. Pearl River Navigation, LLC
The United States District Court Eastern District of Louisiana issued an important ruling on burden of proof in denying a Jones Act personal injury claimant any additional recovery. The case presented an obvious risk of liability. A 120-foot crane boom aboard a deck barge catastrophically failed when a shackle tore loose from the load, causing the boom to release, rise aloft, arc and crash onto the stern of the barge. The parties stipulated that the defendant was solely responsible for the crane failure. But the issue of medical causation was reserved because the plaintiff’s injuries did not occur as a direct result of the plaintiff’s response to the noise and commotion caused by the failure and subsequent crash. The plaintiff was not directly involved in the operation of the crane; he was cooking in the galley at the time.
There were no eyewitnesses to the plaintiff’s injury, and the Court found his testimony was not credible. The plaintiff testified that he injured himself while exiting the galley door, but an eyewitness contradicted his testimony. The court disbelieved the plaintiff’s contention that he fell exiting the galley door. Without other evidence in the record of how he was injured, the Court could not relate his injury to the crane collapse.
“It is possible that Savarese injured himself in some way as a result of this incident, but the Court need not speculate about that. The falling boom did not hit Savarese or the galley, and it fell 10 to 15 feet away. The standard of causation may be light for Jones Act negligence claims, but it is the plaintiff’s burden to show how he was injured and relate the injury to the defendant’s negligence or the unseaworthy condition of the vessel, and Savarese has not met this burden.”
Ultimately, the Court determined that even though there was an obvious event that might result in a number of personal injuries, the plaintiff still has the burden of proving how he was injured and tying that injury to the defendant’s negligence or other fault.
Bellsouth Extends Appreciation to FR
BellSouth recently thanked Fowler Rodriguez attorney, Wade P. Webster, for what it described as “Excellent!!” work persuading the United States Fifth Circuit Court of Appeals to reject the claims of a telephone splicer for overtime wages for repair work in the aftermath of Hurricane Katrina. BellSouth had to pay nothing under the decision. The Fifth Circuit Court of Appeals rejected the overtime wage claims under the Fair Labor Standards Act, even though the splicer worked twelve hour days for several months repairing the devastated telephone network surrounding New Orleans after Hurricane Katrina.
Wade P. Webster persuaded the Fifth Circuit Court of Appeals to reject the overtime wage claims on the grounds that the splicer was an independent contractor, even though the Court had previously held that the splicers working for BellSouth in Mississippi performing the same work were employees entitled to an award of overtime wages and penalties.
Juan E. Serralles, IV Aids in Hotel Acquisition
Juan E. Serralles, IV represented a Venezuelan principal and a group of investors in the acquisition of a 160 room - 14 story hotel in the Mary Brickell Village area. The representation also included negotiating a multi-year franchise agreement with Starwood Hotels. Located in the heart of Miami’s financial district, the hotel will be the first Starwood Hotel under the aloft flag. The client plans to acquire four additional hotels in the South Florida area.
Royal Caribbean Cruise Lines recognizes Fowler Rodriguez with a Celebrity Model Ship
Royal Caribbean Cruises Ltd. and Rolls-Royce announced that they reached a suitable and amicable resolution to the lawsuit regarding the Mermaid pod-propulsion system on Celebrity Cruises’ Millennium-class ships.
The day news of settlement broke George Fowler sent a letter out to his colleagues. He wrote:
My gratitude goes to all of you who worked on the case because you made us proud. I can tell you that virtually all our offices participated. Mary Hoelle and Frank Quesada from the Miami office were outstanding and of course, this case would never have progressed without the planning defined by Toney Rodriguez, and his experienced team.
We are grateful for RCCL’s leadership in Messrs. Fain, Stein and Hanrahan, who asked for and obtained for FR the full cooperation of RCCL’s committed staff. We became one team.
Royal Caribbean filed suit against Alstom Power Conversion and Rolls-Royce. Alstom first settled with Royal Caribbean for $38 million. On January 11, 2010, at the courthouse, Royal Caribbean Cruises Ltd. and Rolls-Royce announced they reached a suitable and amicable resolution to the lawsuit regarding the Celebrity Cruises’ Millennium-class ships.
The press release issued that day stated that the settlement would generate a net increase of approximately $65 million in Other Income (expense) in Royal Caribbean’s 2010 first quarter results.
Royal Caribbean Cruises Ltd. is a global cruise vacation company that operates Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Cruises and CDF Croisieres de France. The company has a combined total of 39 ships in service and four under construction.
A Substantial Victory In Longshore/DBA Claim
In August 2009, Delos “Dee” Flint secured a substantial victory for clients, Chartis and Eagle Support Services, when Law Judge Lee J. Romero, Jr. issued an order denying compensation and medical benefits to the plaintiff. The plaintiff, a civilian contractor in Iraq, claimed he was injured while installing a 90 lb air conditioner in a Humvee. The plaintiff allegedly fell backwards while holding on to the air conditioner and incurred back and neck injuries as a result of the fall. The plaintiff reported the injury, but continued working for another four months in the deployed location. When the plaintiff returned home, he began seeing local physicians and orthopedic surgeons and later filed a claim against Chartis and Eagle Support Services under the Longshore and Harbor Workers’ Compensation Act (LHWCA) and its extension, the Defense Base Act.
During the trial in Savannah, Georgia, Mr. Flint introduced evidence that the problems the plaintiff complained of were related to a pre-existing condition and that his degenerative arthritis stemmed from the pre-existing injury, not his work-related accident in Iraq. Under the 20(a) presumption of the LHWCA, the law presumes that an employee’s injury is related to the conditions of his work.
Judge Romero found that Mr. Flint was able to successfully rebut the presumption through substantial evidence of a pre-existing condition, and that although the plaintiff sustained a neck strain during his fall, that strain had healed, and his current problems were due to an unrelated injury. The Court observed that there were no residual disabilities as a result of the neck strain that occurred in Iraq, and thus nothing to prevent the plaintiff from returning to work. The Court discussed that not only could the employee have returned to work, but that the employer established the availability of suitable alternate employment for the plaintiff. Judge Romero denied all past and future compensation benefits, future medical benefits, and attorney’s fees in favor of FR’s client.
Houston and New Orleans Offices Team Up To Win $1M+
Through a team effort, involving both the New Orleans and Houston offices, FR was recently able to secure more than $1,000,000 in damages for long-time client, Hornbeck Offshore Services, one of the world’s largest suppliers of Offshore Vessels (OSV).
Hornbeck’s OSV, the Eerie Service, sank in 2007 during Hurricane Humberto while in a facility owned by R&R Marine. Hornbeck brought suit against R&R Marine and its insurer in a bifurcated trial, a two stage trial where the liability is determined prior to and separately from money damages. New Orleans Attorney Skipper Chenault partnered with Stacey Norstrud of the Houston Office to secure a verdict in favor of Hornbeck during the liability portion of the two phase trial. The court held that R&R was responsible for the sinking of Hornbeck’s OSV. In December of 2009, Ms. Norstrud was back in the court room with Houston partner, Tim Strickland, to determine the damages portion of the case. The trial resulted in an award of more than $1,000,000 for Hornbeck. The diligent efforts of the trio of attorneys reflect great credit upon the firm and its ability to seamlessly operate though geographically separated.
Success In Tidewater Bench Trial
In January 2010 a case on behalf of Quality Shipyards, a Tidewater affiliate, was tried by New Orleans office partners Norman Sullivan and Stephanie Skinner, before U.S. District Judge Kurt Engelhardt of the Eastern District of Louisiana. The plaintiff, Quality Shipyards, filed a claim against the defendant for approximately $500,000 of unpaid work Quality had performed on a vessel belonging to the defendant. The vessel was subsequently seized and the company who owned it declared bankruptcy. The defendant, a customer of Quality Shipyards, then decided to dispute the value of the work performed. At the end of the trial, Judge Engelhardt ruled in favor of Quality, awarding virtually the entirety of its claim against the defendant and its affiliate companies.
Warehouse Receipt Validated for Hayes/Dockside, Inc.
In Sasol Wax Americas, Inc. etc. v. Hayes/Dockside, Inc, C.A. No. 06-4790 (E.D. La. May 14, 2008), Edward LeBreton, III and Stuart Ponder were successful in defending Hayes/Dockside, Inc. The plaintiff sought recovery for a quantity of wax damaged by Katrina’s floodwaters. Evidence was produced that the plaintiff had accepted a receipt that provided for notice of claim within 60 days of redelivery of the goods to the depositor or notice of damage and that suit must be filed within nine months. The plaintiff had done neither.
The U.S. District Court in New Orleans found in the defendant’s favor holding that, between sophisticated business parties, these terms would be enforced. In particular, the court noted that the prohibition of the Louisiana Civil Code against making prescription more onerous means that prescription may not be made more onerous on the defendant by lengthening the time period. Therefore, the provision reducing the period to nine months is valid.
The decision should be of assistance to warehouse operators because the terms in question were based on the Standard Terms and Conditions for Merchandise Warehousemen promulgated by the American Warehouse Association in 1968 and the International Warehouse Logistics Association in 1998. The case is significant because similar provisions are included in many warehouse receipts, therefore, the decision should assist warehouse owners in defending a variety of claims.
When a Seaman Isn’t a Seaman
New Orleans’ partner Mat Gray, assisted by associate Shelley Miller, successfully urged a motion for summary judgment to deny seaman status and for judgment in favor of their client Trinity Catering, Inc. in a Jones Act case. Trinity had provided a cook to work on a semi-submersible drilling barge owned by Manson Exploration Co. The cook had been employed by Trinity for three weeks and all of his work was performed on the Manson drilling barge until he was injured. The cook required a total knee replacement; he did not return to work. He filed suit in the United States District Court for the Eastern District of Louisiana as a seaman under the Jones Act against Trinity for negligence, and against Manson.
Under a U.S. Supreme Court decision, the legal standard for seaman status is whether (1) the employee’s duties contributed to the function of the vessel and the accomplishment of its mission and (2) whether he had a connection to a vessel (or identifiable fleet of vessels under common ownership) that is substantial in terms of both duration and nature. The plaintiff met the first test. The second test has a rule of thumb that unless the employee spends 30 percent or greater of his employment on a vessel, or fleet, he will ordinarily not be held to be a seaman. Although the plaintiff spent 100 percent of his time on the Manson vessel, on the basis of an affidavit and the work records of other employees over a one year employment period, the court concluded that, absent the injury, in the future the cook would have been assigned to various vessels owned by Trinity clients and could not prove he met the 30 percent threshold. The motion for summary judgment was granted in favor of Trinity on December 11, 2007. Manson settled.
The decision has precedential value considering that plaintiff performed his entire work on a vessel.
In Houston, the Best Defense is a Good Offense
Houston partner Tim Strickland, assisted by Justin Renshaw and George Gaitas, put this motto to work recently, turning a suit filed against a bulk material marine terminal operator into a moneymaker for the client by way of a counter claim.
The original claim arose from an agreement for the client to provide vessel discharge services at its pet coke facility, with the plaintiff agreeing to use the client’s terminal exclusively for discharging its imported pet coke. When the plaintiff filed suit seeking nearly $500,000, Fowler Rodriguez filed a counter claim for breach of the exclusivity provision. Documents produced only after aggressive discovery efforts by the firm’s Houston office showed the counterclaim was much stronger than plaintiff’s original claims. On the morning of trial, after two mediations and a court-ordered settlement conference had failed to resolve the case, the plaintiff- turned-defendant-settled the case for $160,000 in cash payments and the promise to add $600,000 in new pet coke business to the client’s Gulf Coast facilities over the next two years.
On a smaller scale, Tim Strickland and Kim Conkey showed their willingness to head to the courthouse to defend a large nationwide maritime terminal operator against a claim of damage to steel coils, which had been stored in the client’s Port of Houston warehouse. A thorough investigation, with significant input from the client’s “on the ground” personnel, revealed the damage claimed could not have occurred at the warehouse. Despite pressure from the plaintiff’s counsel and the court, the client made no settlement offer and the case was set for trial. Just days before the trial date, the plaintiff dismissed the case. The client recognized it was our willingness and ability to have this matter ready to go to trial that produced the dismissal.
Class Certification Denied
New Orleans’ partner Robert Johnston successfully opposed an effort by a group of property owners, crabbers, shrimpers and fishermen to obtain class certification for their claims following an oil spill in Bayou Perot, south of New Orleans. Mr. Johnston’s client was ExPert Oil & Gas, owner and operator of an oil well, which was run over by a tug and barge, resulting in a spill. The captain of the tug did not report the incident and instead took measures to conceal his involvement. This incident has spawned a complex web of litigation, including a petition for limitation of liability filed by the tug owner, a declaratory judgment action filed by the tug owner’s underwriters on the issue of insurance coverage, and the putative class action suit. Mr. Johnston argued on behalf of ExPert at the class certification hearing in the United States District Court for the Eastern District of Louisiana. At the conclusion of the hearing, Judge Feldman denied the motion for class certification and ruled that each member of the putative class instead had to assert its own claim individually.
Appeals Court Upholds Win for CSX
New Orleans’ partner Robert Johnston secured a win for defendant CSX World Crane Service in a Longshore and Harbor Workers Compensation Act claim by a former employee. The claimant asserted he had injured his back in an unwitnessed lifting incident and thereafter underwent both a hip replacement and a spinal fusion. At trial, Mr. Johnston was able to show the plaintiff had an extensive history of pre-existing back injuries, and that he had made numerous statements to a co-worker that he intended to stage an accident. The co-worker recorded these statements in a daily journal. The Administrative Law Judge found the plaintiff lacked credibility and had failed to prove a compensable injury had occurred, while CSX had proven its contention that the alleged incident did not occur as claimed. Thereafter, the Benefits Review Board affirmed the trial decision, and the United States Fifth Circuit Court of Appeals affirmed the trial decision as well.
A Strong Defense Wins Again
After one mistrial and weeks in a second trial, Houston partner Allison H. Gabbert, representing defen-dants, SecurityComm Group, Inc. and Westex Communications, LLC, recently prevailed on all defenses and counter-claims against allegations related to SecurityComm’s client’s acquisition of Westex Communications in 2003. Following years of discovery and case development, Ms. Gabbert was able to show the plaintiffs–a group of former Westex membership unit holders–had perpetrated fraud upon SecurityComm through numerous misrepresentations related to the acquisition. Plaintiffs, one of whom is a major league baseball player, had concealed information before and during the litigation, but Ms. Gabbert followed every lead and was able to track down witnesses and documents that exposed the fraud. After a big break in the case in November 2007, plaintiffs’ counsel immediately began requesting a walk-away, take-nothing judgment for all parties. Confident in the strength of their position, Ms. Gabbert and her clients refused. In 31 questions submitted to the jury, the plaintiffs failed to prevail on any of their claims, while SecurityComm and Westex prevailed on all of their defenses and counter-claims and were awarded actual damages and stipulated attorney’s fees.
Summary Judgment for London Underwriters
Summary judgment was obtained in favor of London Underwriters in a significant insurance coverage matter. The issue arose as to whether a contractor had liability coverage for defective paving work in a parking lot at a funeral home. After hundreds of thousands of dollars were incurred by the contractor to fix the defective work, coverage was sought from London Underwriters. Michael McCoy and Robin Wexler filed a declaratory judgment action in federal court in Austin, Texas and obtained summary judgment of no coverage based on a number of applicable exclusions in the policy.
Faux Fall Fails to Win in Court
Summary judgment was obtained for a defendant when a nurse was severely injured in an alleged fall at a rent house. Michael McCoy represented the management company of the rent house, and surprised the plaintiff in depositions by showing two pre-existing injuries that she had already denied on the record, and by also demonstrating that plaintiff had exhibited drug-seeking tendencies. The Court became convinced the incident did not happen.
Recovery Granted in Indemnity Claim
In the case of Brad Trahan vs. Stric-Lan Companies Corp., et al, Jim Carroll, was able to obtain recovery against Stric-Lan Companies Corp. in connection with an indemnity claim for defense costs. Carroll successfully defended Apache Oil and Gas Co. and Ensco Offshore Co. and had them dismissed by summary judgment. Carroll also successfully had Apache picked up for defense and indemnity purposes by Tiburon Divers and their underwriters wherein Apache recovered almost all of its defense costs and had Tiburon’s CGL underwriters settle the main claim against Apache and Cross Maritime, whom Apache had been defending. This case is significant due to the fact that defense costs are recoverable despite the applicability of the Louisiana Oilfield Indemnity Act in those situations where the indemnified oil company is found free of any fault in the main demand.
United National Insurance Scores in Dallas Court of Appeals
United National Insurance brought in Fowler Rodriguez to assist on an appeal of an unfavorable arbitration award in a personal injury case. As allowed under the Arbitration Agreement, Michael McCoy and his team filed notice of appeal with the American Arbitration Association (AAA). The plaintiff challenged the right of appeal and filed a proceeding in the Dallas County District Court.
The trial judge struck down the appellate provision in the Agreement and stayed any further appeal at the AAA level. This meant the plaintiff could seek to enforce the award and prevent any appeal. McCoy and his team thus appealed the decision of the trial judge to the Dallas Court of Appeals, and sought mandamus as to the trial judge’s decision so that the original appeal would be allowed to proceed at the AAA level. The Dallas Court of Appeals found that the plaintiff had waived her right to now challenge the appeal at the AAA level, conditionally granted mandamus, and stated that the appeal may continue at the AAA level.
Underemployment Equals Reduced Payments for Service Employers
A Pensacola, Florida claimant recently brought suit under the Defense Base Act against a KBR subsidiary, Service Employers International, Inc., for injuries allegedly sustained in Iraq in connection with civilian logistical support for the war effort. The claimant alleged that he was entitled to receive a compensation rate based upon his “uplifted” salary from Iraq. The claimant’s counsel asserted that the claimant was entitled to the maximum amount pursuant to the Zimmerman decision, which is currently before the United States Circuit Court of Appeal.
On behalf of the KBR subsidiary, Dee Flint countered with two legal arguments, the first of which was that the Zimmerman decision did not apply in this case and he argued that the duration of employment in Iraq was only temporary and that the court should focus on the domestic work history of the claimant in arriving at a compensation rate. Additionally, Flint argued that upon his return, the claimant was underemployed and that his compensation rate should be reduced from the maximum allowable rate.
The Court ruled that the claimant was indeed underemployed and had the capacity to earn quite a bit more. As a result, the Court reduced the claimant’s average weekly wage by approximately $300 per week, which equated to a savings of $15,600 per year and a savings of over $500,000.00 to the defendant over the life expectancy of the claimant.