Czaplicki v. The Vessel "SS Hoegh Silver-Cloud"

FRANK, Circuit Judge.

1. When an injured party elects to receive an award of compensation under the terms of the Longshoremen’s and Harbor-Workers’ Compensation Act, the election operates as an assignment to his employer or his employer’s insurer, of his right of action against third persons who may have caused the injury. Hunt v. Bank Line, 4 Cir., 35 F.2d 136. The injured party is not without a financial interest in subsequent proceedings, however, for if the assignee recovers from the third person any amount in excess of the award of compensation, that excess goes to the injured party. Libelant argues that, because of this financial interest in the potential recovery from the third person, he is, in effect, a beneficiary, and the assignee is, in effect, a trustee who holds a right in action in trust for the injured party. He cites the following words of Judge Learned Hand, written in respect of the statute as to compromises between assignee and tort-feasor: “ * * * although it is true that, by accepting compensation, the employee assigns his claim against the tort-feasor to the employer or insurer, the assignee holds it for the benefit of the employee so far as it is not necessary for his own recoupment. The assignee is in effect a trustee, and, although it is true that the statute gives him power to compromise the whole claim, he must not, in doing so, entirely disregard the employee’s interest.” United States Fidelity & Guaranty Co. v. United States, 2 Cir., 152 F.2d 46, 48.

The contention may be said to have particular force where, as in the instant case, the assignee is not in the ordinary position of adverse interest to the third party, but is an insurer who has a common interest with the third party because he has also insured that party.

We do not, however, need to decide this issue; for, on account of his laches, libelant has surely lost whatever interest he may once have had in recovery from the third party. Whether the statute of limitations of New Jersey, where the libelant resides and where the accident occurred, or the statute of limitations of New York, where suit was brought, is our guide, the time has long since passed when the assignee might have recovered against the alleged tortfeasor.

2. Libelant contends, in the alternative, that no legitimate award of compensation was ever made because of alleged procedural defects in the compensation proceedings. But the statute allows direct judicial review of an award, 33 U.S.C.A. § 921, and that section provides the exclusive method of securing judicial relief. Even assuming, however, that an award may be thus collaterally attacked, libelant’s allegation of error is without merit. He alleges that the deputy commissioner did not literally comply with the procedural requirement that he either hold a hearing on the claim or make an award without a hearing after twenty days has expired since service on the employer of notice of the claim. 33 U.S.C.A. § 919. In the instant case, there was no hearing nor was a hearing requested. Admittedly, the deputy commissioner did not wait until twenty days had expired after notice to the employer. But that requirement is solely for the benefit of the employer by allowing him sufficient time to prepare a defense, if any, to the claim.

Affirmed.