UNITED STATES COURT OF APPEALS
For the Second Circuit
August Term, 1999
(Argued: April 11, 2000 Decided: June 02, 2000
Docket No 99-9062
THE CITY OF NEW YORK,
B e f o r e :
NEWMAN, KEARSE, KATZMANN, Circuit Judges.
Appellant appealed from an amended judgment
of the United States District Court for
the Southern District of New York (Lewis
A. Kaplan, Judge) granting appellee's motion for summary judgment.
Vacated and remanded.
EDWARD M. KATZ, Cappiello, Hofmann & Katz,
New York, NY, for Appellant.
JULIE STEINER, Assistant Corporation Counsel
(Michael D. Hess, Corporation Counsel of the City of New York; Steven Levi,
Elizabeth S. Natrella, Ralph Foertsch, of counsel), for Appellee.
KATZMANN, Circuit Judge:
George Mooney, plaintiff-appellant, appeals
from the amended judgment of the United States District Court for the Southern
District of New York (Lewis A. Kaplan, Judge), granting summary
judgment in favor of the City of New York, defendant-appellee. The district
court held that an award of workers' compensation benefits constituted
a waiver of a Jones Act claim. For the reasons that follow, we vacate the
amended judgment of the district court and remand with instructions for
The essential facts are not in dispute except
where noted. George Mooney was an employee of the Department of Transportation
of the City of New York (the "City") at all times relevant to this action.
The City is a self-insured employer. In May 1996, while assigned to work
aboard a Staten Island ferry, Mooney slipped and fell on a set of stairs
in the engine room. In June 1996, with the assistance of counsel, Mooney
filed a claim under the New York State Workers' Compensation Law for alleged
injuries to his right leg and back. On June 27, 1996, the City advised
the New York State Workmen's Compensation Board (the "Board"), which is
established under N.Y. Work. Comp. Law
142(1) "to hear and determine all claims for
compensation or benefits" under that law, that the City would not contest
Mooney's right to compensation, provided Mooney submitted prima facie medical
evidence and a medical consultant's report. Mooney did so.
Mooney began receiving compensation benefits
in November 1996 pending a hearing before the Board, but payments were
suspended in December 1996 due to a lack of updated medical evidence. In
January 1997, the first hearing involving Mooney's workers' compensation
claim was held before a workers' compensation law judge. The judge received
evidence regarding Mooney's accident, notice to his employer, his injuries
for the period from the accident until January 1997, and the causal connection
between the accident and the injuries. The judge determined that Mooney
was entitled to workers' compensation benefits from May 17, 1996 to January
15, 1997, less two days he worked, at the rate of $400 per week. He also
directed the City to continue payments beyond January 15, 1997 pending
further determination, and the City complied.
In May 1997, after a hearing, the Board granted
a second award at the same rate to Mooney, covering the period from January
15, 1997 to February 28, 1997, the day Mooney returned to work, and authorized
orthopedic consultation. By notice dated March 28, 1997, the City's Workers'
Compensation Division, Law Department ("Law Department"), informed Mooney
that he had been overpaid $1,680 for the period from February 28, 1997
to March 30, 1997. The same notice indicated that Mooney had received a
total award of $16,400 for a temporary disability, and that "compensation
for disability [had] been paid in full" because Mooney had returned to
work. A second notice from the Law Department to Mooney, dated May 30,
1997, reiterated that he had been overpaid for the period from February
28 to March 2, 1997, and that he had been paid in full.
A third hearing held in December 1997 resulted
in no further award, only authorization for a bone scan of Mooney's left
leg. The fourth hearing was held in April 1998, when Mooney for the first
time alleged injury to his right knee. No additional award was granted
but the case was continued to allow Mooney to produce medical evidence
of his alleged right knee injury. At the fifth and final hearing in October
1998, it was determined that Mooney had suffered a "12 1/2 % SLU [schedule
loss of use]" of his left leg. No finding was made regarding the right
leg. Mooney did not appeal the closure of his case.
Mooney was represented by counsel at each
of the five hearings, although the parties dispute whether his attorney
was knowledgeable about federal maritime law and whether the attorney had
advised Mooney of his federal maritime rights.
In January 1999, represented by a different
attorney, Mooney commenced the present action, asserting causes of action
for negligence under the Jones Act and for unseaworthiness under general
maritime law, as well as for a seaman's traditional remedies of maintenance
and cure.(1) After discovery, the City moved
for summary judgment on the ground that Mooney's acceptance of workers'
compensation over a nine-month period, while represented by counsel, together
with his failure to appeal timely the closure of his case, constituted
an implied waiver of his federal maritime rights.(2)
A. The district court's decision
By Order dated August 2, 1999, the district
court granted the City's motion. On Mooney's motion for reconsideration,
the court again held in favor of the City and entered judgment accordingly.
The district court relied primarily on Heagney v. Brooklyn Eastern Dist.
Terminal, 190 F.2d 976 (2d Cir. 1951), which dealt with the analogous
question of whether acceptance of workers' compensation benefits constituted
a waiver of remedies otherwise available under the Federal Employers' Liability
Act, 45 U.S.C. 51 et seq. ("FELA"). The court:
underst[ood] Heagney as adopting the
view, essentially policy-based, that the active pursuit of a worker's compensation
claim in which the claimant is represented by counsel waives any maritime
tort claim without regard to the subjective understanding and intention
of the plaintiff.
Mooney v. City of New York, No. 99
Civ. 0005, slip op. at 3 (S.D.N.Y. Aug. 25, 1999).
The court found the facts in the present case
to be "at least as strong for the defendant as those in Heagney."
at 2. In particular, the district court found that:
[w]hile the City did not controvert compensation,
payments, after initially commencing were terminated in December 1996.
The Workers' Compensation Board subsequently held five hearings . . . on
issues including the accident, the causal relation between the claimed
injuries and the accident, the extent and permanency of the injury, the
need for further treatment, and the rate of compensation. Plaintiff was
represented throughout by counsel. He obtained resumption of compensation
payments after the initial termination and a further series of awards.
He did not institute this action until approximately 26 months after first
receiving compensation payments, which ultimately totaled over $16,000.
Id. Based on these facts, the district
court granted summary judgment for the City.
B. Reyes v. Delta Dallas Alpha Corporation
In December 1999, after the district court's
ruling, this Court decided Reyes v. Delta Dallas Alpha Corp., 199
F.3d 626 (2d Cir. 1999). The plaintiff in that case, while receiving ongoing
voluntary workers' compensation from his employer, notified his employer
that he had asserted a claim, presumably with the Board, under federal
maritime law and that he intended to treat the compensation payments as
a "set-off." See id. at 628. The record did not indicate
that either the employer or the Board acted on this claim before the employee
filed a subsequent Jones Act suit in federal court. See id.
On motion by the employer, the district court granted summary judgment
dismissing the complaint on the ground that the plaintiff's prosecution
of a claim for state workers' compensation benefits amounted to a waiver
of his Jones Act rights. See id.
On appeal, this Court vacated the district
court's judgment, noting that:
In Southwest Marine, Inc. v. Gizoni,
502 U.S. 81, 91 (1991), the Supreme Court held that the receipt of voluntary
worker's compensation payments under a federal worker's compensation statute
does not bar a subsequent action under the Jones Act, unless the claimant
received a formal award from the compensation board settling his claims
in their entirety.
Id. (emphasis added). Therefore, the
Court held that "federal law does not treat Reyes's mere receipt of interim
compensation payments as a waiver of his Jones Act claim." Id. at
Furthermore, the Court held that 113 of the
New York Workers' Compensation Law did not bar the maritime action. Section
113 provides, in relevant part, that:
awards according to the provisions of this
chapter may be made by the board in respect of injuries subject to the
admiralty or other federal laws in case the claimant, the employer and
the insurance carrier waive their admiralty . . . rights and remedies .
. . .
N.Y. Work. Comp. Law 113 (McKinney 2000).
The Court concluded that Reyes's conduct would not be considered as a waiver
under New York law because he "never 'evince[d] an intention to waive redress
under the Jones Act.'" Reyes, 199 F.3d at 629 (alteration in original)
(quoting Dacus v. Spin-Nes Realty & Constr. Co., 22 N.Y.2d 427,
The Court expressly rejected the employer's
reliance on Heagney, stating that it was "superseded authority"
insofar as it predated Gizoni and the New York Court of Appeals'
interpretation of 113. Reyes, 199 F.3d at 629. Because the district
court's decision in the present case rested heavily on Heagney,
we vacate and remand for the court to reconsider the City's summary judgment
motion in light of Reyes and this opinion.
The parties in this case dispute whether Mooney
had received a formal award from the Board that bars the present action.
The City seeks merely to equate a formal award with a final decision of
the Board. It points out that Mooney received notice that his case had
been closed, that the $16,400 awarded to him represented payment in full
for his disability, and that the decision became final and conclusive when
Mooney failed to file a timely appeal. Mooney, on the other hand, contends
that only the receipt of a lump sum award above and beyond his workers'
compensation entitlement should count as a waiver of his federal claims.
We address in this opinion the meaning of
"formal award," referred to in Reyes, and the circumstances under
which the receipt of a formal award constitutes an implied waiver of a
Jones Act or general maritime law claim as a matter of federal law. We
reject Mooney's definition of formal award and conclude that the City's
definition is insufficient.
A. Waiver under federal law
None of the authorities cited by the Reyes
court or by the Supreme Court in Gizoni defined a formal award.
Nor does this term appear anywhere in the New York Workers' Compensation
Law. However, the statute provides other guidance. Under the statute, with
limited exceptions not applicable here,(3)
only the Board is authorized to make compensation awards:
The board shall have full power and authority
to determine all questions in relation to the payment of claims . . . and
upon application of either party, shall order a hearing, and within thirty
days after a claim for compensation is submitted . . . , or such hearing
closed, shall make or deny an award, determining such claim for compensation,
and file the same in the office of the chair.
N.Y. Work. Comp. Law 20(1). Section 142, entitled
"General powers and duties of the workmen's compensation board," provides
that the Board is empowered, among other things, to hear and determine
all claims for compensation or benefits and to modify or rescind awards.
id. 142(1). The statute also uses the term "award" interchangeably
with the term "decision". See id.
23 ("An award or decision of the board shall
be final and conclusive upon all questions within its jurisdiction . .
. ."). An award by the Board is contrasted with situations where the employer
or insurer pays compensation to the claimant directly, "without waiting
for an award by the board," because no controversy exists between them.
25(1); see also 9 Arthur Larson and Lex K. Larson, Workers' Compensation
Law 90.51(a)-(c) (1999) (noting that compensation may be given without
the employee ever having filed a claim, upon the filing of a claim but
without a Board award, or pursuant to an award); Grant Gilmore and Charles
L. Black, Jr., Law of Admiralty 435 (2d ed. 1975) (same).
We therefore believe that a "formal award"
is a written decision issued by the Board and filed with the office of
the Chair of the Board. A decision or award is issued by the Board when
it is made by "a member or panel of the board or by a Workers' Compensation
Law Judge." N.Y. Work. Comp. Law App.
300.1(a)(1). An award may be formal even if
it was made without the benefit of an evidentiary hearing because the Workers'
Compensation Law does not mandate a hearing before the Board issues an
award. In addition, the award must become final and conclusive, and not
be subject to further modification, either because the time for administrative
and judicial appeals has expired, or because the award has been affirmed
on appeal. Seeid. 23. A commonsense application of this definition
is that a formal award may provide for a lump sum payment or a series of
payments. We reject Mooney's argument, based on his misplaced reliance
on a footnote in Reyes, that only a lump sum payment exceeding his
workers' compensation entitlement may be deemed a formal award precluding
the Jones Act suit. See Reyes, 199 F.3d at 629 n.1. That
decision merely explained that a petition to the Board for a lump sum payment
was insufficient to trigger a waiver because, under Gizoni, only
the receipt of payments constitutes a waiver. See id. Reyes
did not suggest, much less hold, that only a lump sum payment may be deemed
We emphasize that a complainant's receipt
of a formal award constitutes a waiver of his or her federal maritime claims
only if the formal award "settl[ed the complainant's] claims in their entirety."
at 628. This requirement is simply an application of the well-established
principles of waiver, which we do not interpret Reyes to have altered.
We have held, in other situations, that a waiver need not be express, but
may be inferred from the conduct of the parties. See Tray-Wrap,
Inc. v. Six L's Packing Co., 984 F.2d 65, 68 (2d Cir. 1993); NLRB
v. New York Tel. Co., 930 F.2d 1009, 1011 (2d Cir. 1991). "[T]he conduct
said to constitute a waiver must be clear and unequivocal, as waivers are
never to be lightly inferred." Tray-Wrap, 984 F.2d at 68; seeBanff,
Ltd. v. Colberts, Inc., 996 F.2d 33, 36 (2d Cir. 1993). We will infer
a waiver only where "the parties were aware of their rights and made the
conscious choice, for whatever reason, to waive them." New York Tel.,
930 F.2d at 1011. Moreover, the party asserting an implied waiver as a
matter of law carries the burden of proving that these requirements have
been met. See id. (Party asserting waiver "bears the weighty
burden of establishing that a 'clear and unmistakable' waiver has occurred."
(quoting Metropolitan Edison Co. v. NLRB, 460 U.S. 693, 708 (1983)));
cf. United States v. Omdahl, 104 F.3d 1143, 1146 (9th Cir.
1997) (party asserting the affirmative defense of estoppel has burden of
These fundamental principles are equally applicable
to the workers' compensation context. Thus, where the employer (or insurer)
establishes that the complainant has made a claim to the Board for maritime
damages, the Board has issued a formal award purporting to settle all of
the complainant's claims, and the complainant has failed to appeal, the
dual requirements of knowledge and subjective intent are satisfied. In
these circumstances, the claimant's receipt of a formal award amounts to
a waiver of his or her maritime remedies as a matter of federal law.
On the other hand, a formal award, even though
final, would not bar a federal maritime action if it does not resolve all
of the claims that the injured party presented to the Board, since such
an award would not settle the injured party's claims in their entirety.
Acceptance of a formal award also would not waive a federal maritime action
commenced before the award became final, since in that case the complainant
has indicated an intent to seek redress in a different forum before the
award became final. Furthermore, a formal award cannot be said to extinguish
a claim that was never presented to the Board and for which the statute
of limitations has not yet expired.
To summarize, a formal award is a written
decision issued with or without an evidentiary hearing, by a member or
panel of the Board or by a workers' compensation law judge, and filed with
the office of the Chair of the Board. Acceptance of a formal award constitutes
an implied waiver of a complainant's maritime claims as a matter of federal
law where those claims were presented to and resolved by the Board, and
the Board's award became final and conclusive pursuant to 23 of the New
York Workers' Compensation Law before a maritime action is filed. On remand,
therefore, the district court should consider: (1) whether Mooney had filed
a claim with the Board for maritime damages in addition to workers' compensation;
(2) whether the Board had issued a formal award settling all of Mooney's
claims that were pending prior to the commencement of this case;(4)
and (3) whether the formal award, if issued, became final and conclusive
on the parties before Mooney commenced the present action. The district
court is free, of course, to develop additional facts.
B. Waiver under state law
The district court should also consider, on
remand, whether Mooney's conduct amounted to a waiver of his maritime claims
under 113 of the New York Workers' Compensation Law. This is a fact-specific
inquiry which the district court should conduct and resolve in the first
instance. To assist that inquiry, we offer one point of clarification.
In Reyes, this Court noted preliminarily
that if the actions of the employee in that case were deemed a waiver under
New York law, "we would be required to consider whether the state statute
as applied conflicts with important federal regulatory interests." Reyes,
199 F.3d at 629. We believe that South Buffalo Ry. Co. v. Ahern,
344 U.S. 367 (1953), provides guidance in resolving this question. Ahern,
an interstate railroad employee, was injured on the job and was awarded
weekly compensation by the Board. See id. at 368. He later
died of his injuries. See id. at 369. At a subsequent hearing
to determine a final disability award, the railroad for the first time
argued that the Board lacked jurisdiction over the workers' compensation
claim because the deceased was covered under FELA, which allegedly deprived
the Board of jurisdiction. See id. The Board rejected the
argument and the New York Court of Appeals affirmed, invoking 113 and holding
that Ahern had waived his FELA rights by accepting workers' compensation.
On appeal to the United States Supreme Court,
the railroad argued that the state high court's interpretation of 113 "unconstitutionally
authorize[d] the Workmen's Compensation Board to invade a field foreclosed
by governing federal legislation." Id. at 370-71. The Supreme Court
disagreed, finding that the New York Court of Appeals successfully avoided
a federal-state collision by interpreting 113 as "a mere legislative authorization,
the Board to effectuate private agreements for compromising a federal controversy
by resort to an impartial local umpire -- that is all that section 113
of the Workmen's Compensation Law purports to accomplish. The difference
between coercion and permission is decisive." Id. at 372 (emphasis
in original) (internal quotation marks and footnote omitted). If, as a
permissive legislative device, 113 would validly preclude an FELA action,
we see no principled reason why it may not also bar a Jones Act or general
maritime law claim. Therefore, if, on remand, the district court finds
that Mooney's conduct would be an implied waiver under New York law, then
the court may conclude that 113 precludes the present action. We stress,
however, that we express no opinion on the merits of the City's waiver
For the reasons explained above, we vacate
the amended judgment of the district court and remand for further proceedings
consistent with this opinion.
1. Maintenance includes
sustenance and a berth while aboard ship and payment for the cost of board
and lodging while ashore. Cure refers to proper care of the injured seaman.
Martin J. Norris, The Law of Maritime Personal Injuries 29-30 (4th ed.
1990). Mooney does not appeal the dismissal of his claim for maintenance
2. The City did not plead
waiver as an affirmative defense in its Answer to the Complaint. Ordinarily,
"a failure to plead an affirmative defense results in the waiver of that
defense and its exclusion from the case." Charles A. Wright & Arthur
R. Miller, 5 Federal Practice & Procedure 1278, at 477 (1990); seeUnited
States v. Continental Illinois Nat'l Bank & Trust Co. of Chicago,
889 F.2d 1248, 1253 (2d Cir. 1989). A defendant may move to amend its pleading
"to assert an omitted affirmative defense on the written consent of the
adverse party or by leave of court, which 'shall be freely given when justice
so requires.'" Wright & Miller, supra, at 495 (quoting Fed.
R. Civ. P. 15(a)). In this case, Mooney responded on the merits of the
City's waiver defense without objecting to the assertion of the defense
by motion rather than by responsive pleading. Thus, we may interpret Mooney's
conduct as an implied consent to file an amended Answer. Alternatively,
we may construe the district court's ruling on the merits of the waiver
defense as an implied grant of leave to amend the Answer, since Mooney
has not alleged any prejudice. In either case, we conclude that the waiver
defense has not been waived.
3. See N.Y.
Work. Comp. Law 20(2).
4. The latest Board
Notice of Decision in the record, dated December 11, 1997, indicates that
"Case is continued." Although the parties agree that the Board closed the
case after the October 1998 hearing, the only document in the record indicating
that Mooney's claim had been closed is an untitled document on the Law
Department's letterhead, dated October 15, 1998. A notice from the City
does not constitute a formal award of the Board.