Opinion
CIVIL ACTION NO. 03-1348-PBS
November 20, 2003
MEMORANDUM AND ORDER
INTRODUCTION
This case arises out of a bombing accident on the Island of Vieques in Puerto Rico that injured an employee of Plaintiff ITT Federal Services Corp. ("ITT"). The injured person received workers compensation from Plaintiff Pacific Employers Insurance Co. ("PEIC") and then sued the Navy for negligence. When the suit was dismissed for a procedural defect under the Federal Tort Claims Act, Plaintiffs brought this action under the Longshore and Harbor Workers' Compensation Act ("LHWCA"), 33 U.S.C. § 901-950 (1927) against Defendants Noelma Colon Cordoves ("N. Colon") and Harry Anduze Montano ("Anduze"), alleging that these lawyers had negligently represented the injured employee. Defendants now move to dismiss the complaint, arguing that under the LHWCA, plaintiffs have no statutory cause of action.
After review of the parties' briefs, the Court ALLOWS the motion to dismiss Count I.
I. Factual Background
Plaintiffs allege the following facts in their complaint.
On April 19, 1999, Edgar 0. Colon, an employee of ITT at the United States naval installation on the island of Vieques, Puerto Rico, was injured when a Navy pilot errantly dropped two bombs near the control tower in which E. Colon was located. E. Colon suffered physical and psychiatric injuries as a result.
Plaintiff PEIC, ITT's workers' compensation carrier, through ACE USA, Inc., its claims administrator, began paying E. Colon compensation and medical benefits under the Defense Base Act, 42 U.S.C. § 1651-54 (1941) ("DBA"), which by its terms incorporates the LHWCA. Defendants Anduze and N. Colon provided legal representation to E. Colon in connection with E. Colon's claim for DBA benefits.
Anduze and N. Colon filed suit on behalf of E. Colon and his wife under the Federal Tort Claims Act, 28 U.S.C. § 2671-80 (1948) ("FTCA"), on April 17, 2001. The complaint named the United States Department of the Navy, ITT, and an unknown insurance company as defendants and sought $12,000,000 in damages.
On April 3, 2002, the Navy moved to dismiss the complaint against it on the grounds that the FTCA precludes suits against government agencies and employers and provides that the only proper party defendant is the United States. Anduze and N. Colon did not oppose this motion. On May 29, 2002, the court ordered the claims against the Navy dismissed.
On June 26, 2002, ITT moved for summary judgment dismissing the complaint on the basis that the DBA barred E. Colon from suing ITT in tort. On August 30, 2002, the court granted ITT"s motion and dismissed the entire action with prejudice. A later motion for reconsideration was denied. No appeal was taken, and the time by which an appeal could have been taken has expired. Additionally, the two year limitations period in which E. Colon could have filed a tort action against the United States relating to this incident has expired. Colon did not file a suit for legal malpractice against his attorneys.
II. Discussion
A. Motion to Dismiss Standard
For purposes of this motion, the Court takes as true "the well-pleaded facts as they appear in the complaint, extending [the] plaintiff every reasonable inference in [her] favor." Coyne v. City of Somerville, 972 F.2d 440, 442-43 (1st Cir. 1992) (citing Correa-Martinez v. Arrillaga-Belendez, 903 F.2d 49, 51 (1st Cir. 1990)). A complaint should not be dismissed under Fed.R.Civ.P. 12(b)(6) unless "it appears beyond doubt that the plaintiff can prove no set of facts in support of [her] claim which would entitle [her] to relief." Roeder v. Alpha Indus., Inc., 814 F.2d 22, 25 (1st Cir. 1987) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).
B. Longshore and Harbor Workers' Compensation Act
Plaintiffs claim in Count I that they have a statutory right to seek damages pursuant to § 933(b) of the LHWCA against Defendants for their legal malpractice in prosecuting suit on behalf of E. Colon and his wife. Plaintiffs argue that since E. Colon never instituted his own lawsuit against his lawyers, his cause of action is assigned by operation of law to the employer or carrier.
The analysis of the claim begins with the statutory language. Section 933(a) of the LHWCA provides:
If on account of a disability or death for which compensation is payable under this chapter the person entitled to such compensation determines that some person other than the employer or a person or persons in his employ is liable in damages, he need not elect whether to receive such compensation or to recover damages against such third person.
Section 933(b) of the LHWCA further provides:
Acceptance of compensation under an award in a compensation order filed by the deputy commissioner, an administrative law judge, or the Board shall operate as an assignment to the employer of all rights of the person entitled to compensation to recover damages against such third person unless such person shall commence an action against such third person within six months after such acceptance.
Under the LHWCA, 33 U.S.C. § 933(b), "an injured longshoreman may collect [compensation] benefits from his employer and nevertheless prosecute a third-party action for personal injuries, [although] the compensation carrier is entitled to reimbursement if the third-party action proves successful." Moores v. Greenberg, 834 F.2d 1105, 1113 (1st Cir. 1987). To this extent, "the insurer has a subrogation lien on the proceeds of the third-party action." Id. In Moores, the First Circuit addressed the question of whether the damages a plaintiff recovered from his lawyers for malpractice should be reduced by the amount of the statutory lien that plaintiff's workers compensation carrier would have had on the potential recovery in the failed underlying suit under the LHWCA. 834 F.2d at 1113. Plaintiff contended that his damages against his attorney should not have been reduced by the amount of the statutory subrogation lien, arguing that the reduction would result in a double-dipping because "the lien arguably attaches to the proceeds of [the malpractice] action." Id. Rejecting the argument, the First Circuit stated:
The physical injury stemming from the shipboard accident is separate and distinct from the legal injury worked by the lawyer's misfeasance. [Worker compensation carrier]'s right of reimbursement extends to the damages recoverable in consequence of the former — and no further. The purpose of the lien law — to prevent further duplicative recovery for the same injuries and damages — would not be furthered by stretching it to envelop the malpractice ground. The damages granted to plaintiff in this case are free and clear of the reach of the statutory lien.Id. But cf. Bongiorno v. Liberty Mutual Ins. Co. , 417 Mass. 396, 400, 630 N.E.2d 274 (1994) (holding that malpractice damages based on a third-party recovery was subject to a workers compensation lien, and finding Moores inconclusive). Moores is not directly on point because it involved the applicability of a hypothetical statutory lien on damages recovered by an injured party against his attorney in a legal malpractice action. Here, the injured party never sued his lawyer, leaving his carrier and employer to attempt to assert his claim for themselves under § 933(b). However, the reasoning of Moores forecloses plaintiffs' argument: the carrier has a statutory right to reimbursement only with respect to the "third person" who caused the damages. Under Moores, Plaintiffs have no statutory cause of action pursuant to § 933(b).
ORDER
Defendants' motion to dismiss Count I is ALLOWED . Count IV, V AND VI of the Complaint are dismissed to the extent they are dependent on Count I. The remaining counts appear to arise under the Civil Code of Puerto Rico and are therefore dismissed without prejudice.