Petition — Diamond M Drilling Co. v. Gueho

'-.

Supreme Court, U. &

FILED

APR

Iu the

MICHAEL RODAK, JR., Cl

ee ee

Supreme Court of the United States

OCTOBER TERM, 1975

wo @5-1422

DIAMOND M DRILLING COMPANY,

Petitioner

versus

JOSEPH S. GUEHO,

Respondent

Petition for a Writ of Certiorari to the United

States Court of Appeals for the Fifth Circuit

Joseph J. Weigand, Jr.

LAW OFFICES JOSEPH J.

WEIGAND, JR.

P. O. Box 6062

Houma, Louisiana 70361

Attorney for Diamond M

Drilling Company,

Petitioner

——

A B Letter Service, Inc., 327 Chartres St., New Orleans, La. (504) 581-5555

INDEX

Page No

SS BI ccnccncscnnenscenscnsnnsesnenesnesperscesnsennasenssnacscesee 1

I ccicenssitinastsincnnsinnnsasbianibieibibininnisinntnintidiiiasics 1

alicia i tae ciitriitictcancitiaitnitbaniientiiias 2

PRRIIIII IES ccacascnssecnsconcasccenscccnscesncacsasecbenteesoansanesocosecssesennt 2

Reasons for Granting the Writ..........ssssescssseeersesseseeenees 4

i icsicilasienittenieitsiesibiiaatabiteinintainaisiiiinisidiablactadadsiiviin 17

a OE i incictnrnccarninrincininnntinsenintitinitcninnaiin 18

Appendix A - Order to Stay Mandate..........cssseseeeeees 19

Appendix B - Opinion of Circuit Court of Appeals......... 21

Appendix C - Judgment of Circuit Court............sseseee 25

Appendix D - Order Denying Petition for Rehearing....... 27

Appendix E - Findings of Fact and Conclusions of Law.. 28

iii

ii CITATIONS (Continued)

CITATIONS Page No.

Page No. | Strange v. Gulf & South American Steamship

C , Inc., 495 F.2d 1235 (5th Cir., 1974)....... 9

Allstate Investors Inc. v. Bankers Bond Co.., ata

DED FB GED CCA GO ncrsecsrcnsnrcemtnsecsensecetnmensenein 8 | The Santa Madre v. Dagounakis, 277 F.2d 461

A, 4-1960)...cccccosccssrrscveeserscccccccorecevscesecssesssesesssoooes 8

Blanco v. Moran Shipping Company, 483 F.2d -

ee Re Gi Bre sencsencccitersmnsctncnninentieancsnnspseseniscin 10, 16 Williams v. First Na‘ ‘onal Bank,

US $82 (1910) .......cccscsocccosrssecessrreceessrssrscoesnes 8

Cates v. United States, 451 F.2d 411 ai¢ (

| nn a 10, 16

Cia Anon Venezolana De Navegavion v. Harris,

FR EE, eee 8,9

Crisp County v. S. J. Groves & Son Co.,

Fa ae Se OR Fei ctrcsessticeseceniecsinennnan 8

Cummins Diesel Michigan, Inc. v. The Falcon,

Fg | ne 8

Florida Trailer and Equip Co. v. Deal,

BBS F.26 SEPACA S-196B)..ccccccccccoccoccsecovsovscccsccctace 8

Garrett v. Moore-McCormack Co., 317 U.S. 239, )

248, 63 S.Ct. 246, 87 L.Ed. 239 (1942)......ccccccceees 10

Hennessy v. Bacon, 137 US 78 (1890)........ccccccccseeeees 8

Ingalls Iron Works Co. v. Ingalls,

OE ee .

J. Kahn and Co. v. Clark, 178 F.2d 111, 114

Se Be i accesesccnceccesosnnsnneseseonsensesnvercenanmnenvaseemecs 8

Kelly v. Greer, 365 F.2d 669 (CA 3-1966)........00cc00e 8

2, EO eee

IN THE SUPREME COURT OF THE UNITED STATES

October Term 1975

NO.

DIAMOND M DRILLING COMPANY,

Petitioner

versus

JOSEPH S. GUEHO,

Respondent

Petition for a Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

The Petitioner prays that a writ of certiorari issue to re-

view the judgments of the United States Court of Appeals for

the Fifth Circuit entered in the above case on December 17,

1975.

OPINIONS BELOW

The opinion of the District Court for the Western Dis-

trict of Louisiana is not reported.

The opinion of the Court of Appeals for the Fifth Cir-

cuit is reported at F. 2d 924.

JURISDICTION

The judgment of the Court of Appeals for the Fifth

Circuit was made and entered on December 17, 1975, and

copies thereof are appended to this opinion. The petition of

Diamond M Drilling Company for a rehearing was denied on

2

February 2, 1976. The mandate was recalled and stayed by

the Court of Appeals for the Fifth Circuit Court of Appeals

to and including April 5, 1976 by an Order dated March 8,

1976. The jurisdiction of this Court is invoked under 28

U.S.C. 1254(1}.

QUESTION PRESENTED

Can a District Court approve a Jones Act settlement be-

tween a plaintiff and the defendant-employer and, subse-

quently, set aside the settlement in the absence of a factual

basis, rendering it invalid?

STATEMENT

On March 11, 1972, the plaintiff, a Jones Act employee

of Diamond M Drilling Company, sustained an injury to his

right knee, when the crewboat, M/V ELTON D, which he was

riding on, ran aground in the fog in a canal in St. Mary Parish,

Louisiana. The crewboat was transporting the plaintiff and

other members of a drilling crew to Rig 40, a drilling barge

owned by the defendant.

The defendant, through an independent investigator,

Christopher B. Siegrist, negotiated a settlement with the

plaintiff for injuries sustained to his right knee for the sum of

$18,000.00.

On February 8, 1974, the plaintiff, not represented by

counsel, met with Mr. Gary Blaize, an associate from the law

firm representing Diamcad M Drilling Company, and to-

gether they met with Judge Edwin F. Hunter, Jr., United

States District Judge in Lake Charles, Louisiana.

Judge Hunter ordered his Court Reporter to appear and

3

the plaintiff was interviewed by Judge Hunter to determine if

the settlement entered into between the parties was fair to

the plaintiff. Judge Hunter approved the settlement and

executed Findings of Fact and Conclusions of Law and

signed a Judgment in favor of the jlaintiff. The plaintiff was

then paid $18,000.00 and he executed a Release in favor of

defendant and a Satisfaction of Judgment.

On the evening of February 8, 1974, the plaintiff's em-

ployment with defendant was terminated. Neither the in-

vestigator nor the attorneys representing the defendant knew

that the plaintiff would be terminated by the defendant.

The plaintiff was terminated because this was the fifth

accident he had had in five years and he had received over

$35,000.00 in monies to settle the previous claims.

The plaintiff retained counsel and Judge Hunter set

aside the settlement and placed the matter on the trial calen-

dar.

Defendant filed a motion to have Judge Hunter recuse

himself, because it was anticipated that Judge Hunter would

be called as a witness by defendant in support of its argu-

ment that the settlement approved by Judge Hunter on

February 8, 1974 was valid. Judge Hunter did recuse himself

and the case was transferred to Judge Putnam in Lafayette,

Louisiana.

Judge Putnam set the trial of the case for February 25,

1975. Counsel for defendant requested a plenary hearing

prior to trial to determine if the settlement approved by

Judge Hunter was valid. The plenary hearing was held on the

morning of February 25, 1975 and Judge Putnam found in

favor of the plaintiff.

The trial of the case (non-jury) was conducted that

afternoon and Judgment was rendered in favor of plaintiff in

the sum of $25,000.00.

Defendant appeals only from Judge Putnam's ruling in

favor of the plaint’ff at the plenary hearing and the Court of

Appeals for the Fifth Circuit’s affirmance of that ruling.

Defendant contends that there wasn’t any factual basis

and/or dispute to support Judge Putnam’s ruling setting aside

the settlement of February 8, 1974 before Judge Hunter.

REASONS FOR GRANTING THE WRIT

I. District Court

At the plenary hearing, Joseph Gueho, the plaint/ff,

testified :

A He didn’t tell me like that. He just told me

it wouldn’t have any bearing on my job.

Q__sIsn’t it true, Mr. Gueho, that there was no

guarantee of a job to you for any specific

length of time.

A Yes, there wasn’t no guarantee, but... .

Q_ There was no guarantee. Isn’t that true?

A That’s right. But the way he put it to me,

I thought I had a job.

5

Q But the fact of the matter is, Mr. Gueho,

that you were not guaranteed a job. You

admitted that in your deposition a couple of

weeks ago, isn’t that true?

A He didn’t guarantee anything, no.

Q___ He did not guarantee it.

A No.

Q He did not tell you, “Well, Mr. Gueho, you

are going to have a job for five years -

A No.

Q -ten years or one year.”’ He didn’t tell you

that, did he?

A No, sir.

Q And you knew perfectly well that if for some

reason you could not do your job, or if they

wanted to fire you six months after you took

this money, or a year, that they had the pow-

er to do that, did you not, sir?

A Well, yes, I knew that.

(Transcript pages 35-36)

Q You knew, as a fact, that Diamond M Drill-

ing Company could terminate you at any

time following the settlement, or at any time

they wanted to, Isn’t that true?

6

A Yes, I knew that.

(Transcript page 40)

Judge Putnam ruled as follows:

On the question of the release, gentlemen, the

Court has considered the evidence in the case. It

is clear that Mr. Gueho was under the impression

that he would not lose his job because of the

settlement. There is no evidence to show that he

did lose his job because of the settlement. How-

ever, because of his long association with this

company, the fact that he had worked for them

after having had a previous knee injury in 1968,

and another injury to his chest and kidney in 1971,

and had been assured by two of his superiors -

at least one of whom was present in the Court

today and did not testify—that as long as they were

with the company he would have his job, I think

he was under the impression that he would not be

discharged because of the settlement, or when the

settlement was effected.

I am quite certain that neither Mr. Blaize

nor Mr. Siegrist represented to Mr. Gueho that he

would retain his job, and I am also of the opinion,

and I so find, that they, in fact, told him that the

settlement was not connected with his job in any

way, and that his reliance that he would not be

discharged was predicated upon his prior experi-

ence with the company and the prior assurance

that was given to him by his superiors, that I have

mentioned before.

EA EL ET ENN te

7

Furthermore, the fact that the Judge who ap-

proved the release granted a new trial, in my judg-

ment, had the effect of setting aside the release

already executed by action of the Court, and the

Motion is denied on that basis. The Court reserves

the right to make more detailed Findings and Con-

clusions at the end of the case.

I want to say, however, that up to this point

the record reflects that Mr. Gueho has suffered

with his knees for some time. He made one settle-

ment in 1971 for an injury received to his knees

in 1968 that was approved by Judge Hunter in the

Lake Charles Division, and in 1971 he received the

sum of $10,000 for these injuries to his knees. The

chondromalacia was present at that time, and I

would assume-without deciding or finding that the

chondromalacia was present even prior to 1968,

because of the very nature of the disease, or the

condition.

Now, the Court is ready to proceed, gentle-

men, with the remainder of the case.

(Transcript pages 63-65)

It is clear from the transcript quoted above that the

plaintiff, Joseph Gueho, knew full well when he appeared

before Judge Hunter on February 8, 1974 to settle his claim

that the defendant did not guarantee his job as part of the

settlement. The plaintiff clearly admits that he knew he

could be discharged at any time after the settlement for any

reason.

8

Judge Putnam’s finding that, because of prior settle-

ments, where plaintiff was told he could keep his job, led

plaintiff to believe he would keep his job after the settle-

ment of February 8, 1974 is clearly not supported by the

record,

There is no factual basis in the evidence to support the

setting aside of the settlement of February 8, 1974 before

Judge Hunter.

Federal Courts have held under a great variety of cir-

cumstances that a settlement once entered into cannot be

repudiated by either party and will be summarily enforced.

Cia Anon Venezolana De Navegacion v. Harris, 374 F.2d 33,

35 (CA 5-1967). See also Hennessy v. Bacon, 137 US 78

(1890):Kelly v. Greer, 365 F.2d 669 (CA 3-1966); Allstate

Investors Inc. v. Bankers Bond Co.,343 F.2d 618 (CA 6-

1965); Cummins Diesel Michigan, Inc. v. The Falcon, 305 F.

2d 721 (CA 7-1962); Florida Trailer and Equip Co. v. Deal,

284 F.2d 567 (CA 5-1960); Ingalls Iron Works Co. v. Ingalls,

280 F.2a 423 (CA 5-1960); The Santa Madre v. Dagounakis,

277 F.2d 461 (CA 4-1960).

‘* ‘Compromises of disputed claims are favored by the

courts (citing case)’. Where the parties, acting in good faith,

settle a controversy, the courts will enforce the compromise

without regard to what the result might, or would have been,

had the parties chosen to litigate rather than settle.” J. Kahn

and Co. v. Clark, 178 F.2d 111, 114 (CA 5-1949); see also:

Williams v. First National Bank, 216 US 582 (1910); Henn-

essy v. Bacon, supra; Crisp County v. S. J. Groves & Son Co.,

73 F.2d 327 (CA 5-1934).

a

9

The facts clearly show that each of the parties, acting in

good faith, and acting within their authority, entered into a

valid settlement agreement approved by Judge Hunter on

November 8, 1974. The controlling authority in this circuit

is Cia Anon Venezolana De Navegacion v. Harris, 374 F.2d

33 (CA 5-1967), and Strange v. Gulf & South American

Steamship Company, Inc., 495 F.2d 1235 (5th Cir., 1974),

and defendant, respectfully submits that it is entitled to an

Order summarily enforcing the settlement of February 8,

1974 entered into by the parties and approved by Judge

Hunter.

Il. Fifth Circuit Court of Appeals

The Fifth Circuit in its opinion of December 17, 1975

states:

“(1-3) The only issue before this Court is whether

there was a factual basis for the decision of the

trial court in setting aside the settlement. Settle-

ments involving seamen’s rights are subject to

careful scrutiny. See, Garrett v. Moore-McCor-

mack Co., 317 U.S. 239, 248, 63 S.Ct. 246, 87

L.Ed. 239 (1942). In an action under the Jones

Act, the burden is upon the party claiming settle-

ment as a defense to show that it was entered

into by the seaman with an informed understand-

ing of his rights and a full appreciation of the

settlement’s consequences. See, Blancu v. Moran

Shipping Company, 483 F.2d 68 (5th Cir., 1973);

Cates v. United States, 451 F.2d 411 (5th Cir.,

1971). In this case, there was ample evidence to

demonstrate that the plaintiff was led to believe

that he would maintain his employment. Gueho

questioned the insurance adjuster whether the

10 | 11

settlement would affect his job and received the | had undergone surgery and was advised to undergo surgery

reply that there would be no effect. Moreover, in the future. The Court at page 64 stated:

when the plaintiff had entered into a prior settle-

ment concerning a previous injury he obtained the

specific promise from Diamond that he would

maintain his employment. This previous promise,

coupled with the responses given by the adjuster

to plaintiff's questioning concerning his employ-

ment, clearly demonstrates that the plaintiff was

led to believe that the settlement included a pro-

“Obviously if counsel were not aware of the subse-

quent surgical procedures and their costs and se-

quelae or any prognosis for further surgery, they

were in no position to advise their client as to the

adequacy of the proposed settlement.”

mise of continued employment. In short, the de- The Cates case, supra, deals with a situation wherein

fendant did not bear its burden of demonstrating a plaintiff settled with one defendant, Reynolds, on the date

that the seaman fully appreciated the consequences set for trial, at which time the other defendant, the Govern-

of the settlement.” ment, moved for a continuance.

The Fifth Circuit quotes a Supreme Court decision, Subsequently, a ‘Red Letter Release”’ was executed by

Garrett v. Moore-McCormack Co., 317 U.S. 239, 63 S.Ct. the plaintiff in favor of Reynolds and the Government argued

246, 87 L.Ed. 239 (1942), and two Fifth Circuit opinions, that failure to reserve rights against it expressly in the release

Blanco v. Moran Shipping Company, 483 F.2d 63 (5th Cir. operated to dismiss the Government from liability. The Fifth

1973) and Cates v. United States, 451 F.2d 411 (5th Cir. Circuit held the Government’s Argument had no foundation

1971) which in essence stand for the following general in law on fact.

statement of the law, to-wit:

Relying on these two prior cases, the Fifth Circuit then

‘*. . .the burden is upon one who sets up a seaman’s stated:

release to show that it was executed freely, with-

out deception or coercion, and that it was made by

the seaman with a full understanding of his rights.

The adequacy of the consideration and the nature

of the medical and legal advice available to the sea-

man at the time of signing the release are relevant

to an appraisal of this understanding.”

i. “Gueho questioned the insurance adjuster

whether the settlement would affect his job

and received the reply that there would be no

effect.”

2. “Moreover, when the plaintiff had entered

into a prior settlement concerning a previous

injury he obtained the specific promise from

Diamond that he would maintain his employ-

ment. This previous promise, coupled with

In the Blanco case, supra, the plaintiff could not speak

English and was advised to settle his case by his attorneys,

who were without knowledge of the fact that the plaintiff

In the first sentence, the Fifth Circuit states that there

was “ample evidence to demonstrate that the plaintiff was

led to believe he would maintain his employment.” Ap-

parently the ample evidence is contained in the next two

sentences.

The first sentence which supports the Fifth Circuit’s

12

the responses given by the adjuster to plain-

tiff's questioning concerning his employment,

clearly demonstrates that the plaintiff was led

to believe that the settlement included a pro-

mise of continued employment.”

conclusions of ‘‘ample evidence” states:

“Gueho questioned the insurance adjuster whether

the settlement would affect his job and receiv-

ed the reply that there would be no effect.”

This statement by the Fifth Circuit is simply not true.

We quote from the testimony:

Q

Isn’t it a fact that you did indicate indirectly

to him that he may or may not be able to

continue on working on his job.

Did I indicate to him that he may or may not

be able to continuing working ?

Correct.

No, sir.

You didn’t tell him he was going to be fired, or

13

not be fired, or continue to work for the com-

pany after he settled, did you?

I told him that Diamond M Drilling Company

did the hiring and the firing. If he had any

question about his job to speak with them.

I had authority to offer him $18,000, and as

I recall with Mr. Gueho, the conversation was,

“I’m just trying to get an agreement that you

can live with and that they can live with.”

Isn’t it a fact that you made some comment

to the effect that as far as you know, he

would still be able to work for the company?

No, sir.

It is your testimony you never made such a

statement, that as far as you knew he could

continue to work for the company - that

would be up to the company.

I said if he had any questions about his job,

that he would have to talk with Diamond M

Drilling Company.

You didn’t indicate in any way, though, that

he would not be able to work for the com-

pany after he made a statement.

Would you state that again, please?

Did you indicate in any way to him that after

he made a settlement, he would not have a

A

14

job with the company.

No, sir.

(Transcript pages 16-17)

Q

But the fact of the matter is, Mr. Gueho,

that you were not guaranteed a job. You ad-

mitted that in your deposition a couple of

weeks ago, isn’t that true?

He didn’t guarantee anything, no.

He did not guarantee it.

No.

He did not tell you, “Well, Mr. Gueho, you

are going to have a job for five years —

No.

--ten years or one year.”’ He didn’t tell you

that, did he?

No, sir.

And you knew perfectly well that if for some

reason you could not do your job, or if they

wanted to fire you six months after you took

this money, or a year, that they had the

power to do that, did you not, sir?

Well, yes, I knew that.

15

(Transcript pages 35-36)

Q You knew, as a fact, that DiamondM Drilling

Company could terminate you at any time

following the settlement, or at any time they

wanted to. Isn’t that true?

A Yes, I knew that.

(Transcript page 40)

Additionally, this plaintiff appeared before United

States District Judge Edwin F. Hunter who thoroughly re-

viewed the entire matter with the plaintiff to ensure that the

plaintiff's rights were protected.

The second sentence which supports the Fifth Circuit's

conclusion of ‘‘ample evidence”’ states:

“Moreover, when the plaintiff had entered into

a prior settlement concerning a previous injury

he obtained the specific promise from Diamond

that he would maintain his employment. This

previous promise, coupled with the responses

given by the adjuster to plaintiffs questioning

concerning his employment, clearly demonstrates

that the plaintiff was led to believe that the settle-

ment included a promise of continued employ-

ment.”

We again refer to the plaintiff's own testimony wherein

he indicates that he knew that there was “no guarantee” of

a job, if he accepted the $18,000 offer.

The Fifth Circuit then concludes that because of what

the adjuster said (which is not supported by the record) and

16

the fact that the plaintiff had a previous settlement and kept

his job, that this ‘‘clearly demonstrates that the plaintiff was

led to believe that the settlement included a promise of

continued employment.”

The Fifth Circuit has completely ignored the fact that

this plaintiff appeared before U. S. District Judge Edwin

Hunter on February 8, 1974, who fully advised him of all

his rights. Secondly, in his testimony, he admits over and

over again that he realized there wasn’t any guarantee of a

job if he accepted the settlement of $18,000.

The “ample evidence’ on which the Fifth Circuit re-

lies does not support its position, nor do the cases cited,

since each is clearly distinguishable from the facts of this

case.

In Blanco, supra, the plaintiff didn’t speak English and

his attorneys were not aware of prior surgery; and in Cates,

supra, a plaintiff settles with one defendant and the other

defendant attempts to escape liability by claiming that the

release executed by plaintiff released all defendants.

We repeat, the plaintiff testified that he knew there

was no guarantee of a job if he accepted $18,000 for his

case. He was advised of all rights by a U. S. District Judge,

who approved the settlement. The record supports these

statements.

The plaintiff claims that when he had entered into a

prior settlement concerning a previous injury he obtained the

specific promise from Diamond M that he would keep his

job, yet, he testified that he fully realized that when he

settled this claim for $18,000 that he was not guaranteed a

job. This Court takes the first fact and concludes from that,

17

that the plaintiff was “led to believe” he would maintain his

employment when he settled this claim, although he testified

over and over again, as outlined above, that he fully realized

that when he settled this claim there was no guarantee of a

job.

How could the Fifth Circuit reach a conclusion of fact

which is not supported by the evidence. The prior settlement

and guaraitee of a job was merely a smoke screen used by

plaintiff counsel in the trial of the case, but the plaintiff

when confronted with the facts surrounding this settlement,

admitted that there was no guarantee of employment.

CONCLUSION

For the reasons set forth above, it is respectfully sub-

mitted that this petition for a writ of certiorari should be

granted.

Joseph J. Weigand, Jr.

LAW OFFICES JOSEPH J.

WEIGAND, JR.

P. O. Box 6062

Houma, Louisiana 70360

Attorney for Diamond M.

Drilling Company, Petitioner

18

CERTIFICATE OF SERVICE

I hereby certify that I have served copies of the fore-

going Petition for a Writ of Certiorari on opposing counsel,

this 1st day of April, 1976.

JOSEPH J. WEIGAND, JR.

\ pete +

19

APPENDIX A

ORDER TO STAY MANDATE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

NO. 75-2742

FILED: Mar 8,’76

Edward W. Wadsworth

Clerk

JOSEPH S. GUEHO,

Plaintiff-Appellee

versus

DIAMOND M. DRILLING COMPANY, ET AL.,

Defendants-Appellants

Appeal from the United States District Court for the Western

District of Louisiana

ORDER:

ON CONSIDERATION OF THE MOTION of appellants

for recall and stay of judgment issued as mandate in the

above numbered and entitled cause, pending an application

for a writ of certiorari to the Supreme Court of the United

States,

IT IS ORDERED that the judgment issued as mandate,

be recalled and stayed to and including April 5, 1976, the

stay to continue in force until the final disposition of the

20

case by the Supreme Court, provided that within said period

there shall be filed with the Clerk of this Court the certifi-

cate of the Clerk of the Supreme Court that certiorari peti-

tion has been filed.

IT IS FURTHER ORDERED that the Clerk shall issue

the judgment as mandate upon the filing of a copy of an or-

der of the Supreme Court denying the writ, or upon the ex-

piration of the above ncriod unless the above mentioned

certificate shall be filed with the Clerk of this Court within

that time.

s/ LOUIS R. MORGAN

UNITED STATES CIRCUIT

JUDGE

21

APPENDIX B

OPINION OF CIRCUIT COURT OF APPEALS

Joseph S. GUEHO, Piaintiff-Appellee

v.

DIAMOND M. DRILLING COMPANY et al.,

Defendants - Appellants

No. 75 - 2742

Summary Calendar.*

United States Court of Appeals, Fifth Circuit

Dec. 17, 1975

Jones Act employee vho had entered into settlement

for injuries sustained when crew boat in which he was riding

ran aground filed action to hav- settlement set aside. The

United States District Court for the Western District of

Louisiana at Lafayette, Richard J. Putnam, Jr., vacated the

settlement and after trial rendered judgmenc in favor of em-

pioyee and employer appealed. The Court of Appeals held

that in view of evidence demonstrating that employee was led

to believe that settlement included the promise of continued

employment, employer did not discharge burden of demon-

strating that employee, who was discharged on the evening

of the day of the settlement, fully appreciated the conse-

quences of the settlement.

Affirmed.

* Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens

Casualty Co. of New York et al., 5 Cir., 1970, 431 F.2d

409, Part I.

22

1. Compromise and Settlement - 4

Settlements involving seamen’s rights are subject to care-

ful scrutiny. Jones Act, 46 U.S.C.A. § 688 et seq.

2. Compromise and Settlement - 23(1)

In an action under the Jones Act, the burden is upon

the party claiming settlement as a defense to show that it

was entered into by the seaman with an informed under-

standing of his rights and a full appreciation of the settle-

ment’s consequences. Jones Act, 46 U.S.C.A. § 688 et seq.

3. Compromise and Settlement - 23(3)

In view of evidence that seaman who entered into settle-

ment of claim for injury to his knees when crew boat in

which he was riding ran aground believed that settlement

included a promise of continued employment, employer did

not discharge burden of demonstrating that seaman, who was

discharged on evening of day of settlement, fully appreciated

the consequences of the settlement. Jones Act, 46 U.S.C.A.

S 688 et seq..

+k KOK *

Appeal from the United States District Court for the

Western District of Louisiana.

Before THORNBERRY, MORGAN and RONEY,

Circuit Judges.

PER CURIAM:

The plaintiff in this action, a Jones Act, 46 U.S.C.

23

§ 688 et seq., employee of Diamond M. Drilling Company,

sustained an injury to his knees when the crew boat in which

he was riding ran aground in St. Mary Parish, Louisiana.

The plaintiff, who was not represented by counsel, ana the

defendant, who was represented by an insurance adjuster,

entered into a settlement for the sum of $18,000 on Febru-

ary 8, 1974. After interviewing the plaintiff, Judge Edwin

F. Hunter, Jr., of the Western District of Louisiana approved

the settlement. Later, on the evening of the day of the

settlement, defendant terminated plaintiff's employment.

Plaintiff filed an action to have the settlement set aside con-

tending that during the negotiations he had been led to

believe that he would retain his employment. Judge Richard

J. Putnam vacated the settlement and after trial rendered

judgment in favor of the plaintiff for the sum of $25,000.

Defendant appeals from the order of the district judge vacat-

ing the settlement.

[1-3] The only issue before this court is whether there

was a factual basis for the decision of the trial court in

setting aside the settlement. Settlements involving seamen’s

rights are subject to careful scrutiny. See, Garrett v. Moore-

McCormack Co., 317 U.S. 239, 248, 63 S.Ct. 246, 87 L.Ed,

239 (1942). In an action under the Jones Act, the burden

is upon the party claiming settlement as a defense to show

that it was entered into by the seaman with an informed

understanding of his rights and a full appreciation of the

settlement’s consequences. See, Blanco v. Moran Shipping

Company, 483 F.2d 63 (5th Cir. 1973); Cates v. United

States, 451 F.2d 411 (5th Cir. 1971). In this case, there was

ample evidence to demonstrate that the plaintiff was led to

believe that he would maintain his employment. Gueho

questioned the insurance adjuster whether the settlement

would affect his job and received the reply that there would

be no effect. Moreover, when the plaintiff had entered into

24

a prior settlement concerning a previous injury he obtained

the specific promise from Diamond that he would maintain

his employment. This previous promise, coupled with the

responses given by the adjuster to plaintiff's questioning con-

cerning his employment, clearly demonstrates that the plain-

tiff was led to believe that the settlement included a promise

of continued employment. In short, the defendant did not

bear its burden of demonstrating that the seaman fully ap-

preciated the consequences of the settlement.

The judgment of the district court is Affirmed.

25

APPENDIX C

JUDGMENT OF CIRCUIT COURT

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

October Term, 1975

No. 75 - 2742

Summary Calendar

D. C. Docket No. CA 74-168

JOSEPH S. GUEHO,

Plaintiff-Appellee,

versus

DIAMOND M. DRILLING COMPANY, ET AL.,

Defendants-Appellants

Appeal from the United States District Court for the Western

District of Louisiana

Before THORNBERRY, MORGAN and RONEY, Circuit

Judges.

JUDGMENT

This cause came on to be heard on the transcript of the

record from the United States District Court for the Western

District of Louisiana, and was taken under submission by the

Court upon the record and briefs on file, pursuant to Rule

18;

ON CONSIDERATION WHEREOF, It is now here

26

ordered and adjudged by this Court that the judgment of

the said District Court in this cause be, and the same is here-

by, affirmed.

December 17, 1975

Issued as Mandate: Feb 10, 1976.

c

27

APPENDIX D

ORDER DENYING PETITION FOR REHEARING

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 75 - 2742

U.S. Court of Appeals

FILED

Feb 2 1976

Edward W. Wadsworth, Clerk

JOSEPH S. GUEHO,

Plaintiff-Appellee

versus

DIAMOND M. DRILLING COMPANY, ET AL.,

Defendants-Appellants

Appeal from the United States District Court for the Western

District of Louisiana

ON PETITION FOR REHEARING

(FEBRUARY 2, 1976)

Before THORNBERRY, MORGAN and RONEY, Circuit

Judges.

PER CURIAM:

IT IS ORDERED that the petition for rehearing filed in

the above entitled and numbered cause be and the same is

hereby denied.

28

APPENDIX E

FINDINGS OF FACT AND CONCLUSIONS OF LAW

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAFAYETTE DIVISION

FILED: Apr 7, 1975

Robert H. Shemwell

Clerk

By: Ronald G. Weathers

Deputy

JOSEPH S. GUEHO

versus

DIAMOND M. DRILLING COMPANY

and ARGONAUT INSURANCE COMPANY

FINDINGS OF FACT AND CONCLUSIONS OF LAW

This matter came on for trial on February 25, 1975, and

the trial was concluded on February 26, 1975. After con-

sidering the pleadings, stipulations, evidence and argument

of counsel, the court makes the following findings of fact

and conclusions of law.

FINDINGS OF FACT

1.

Plaintiff, JOSEPH S. GUEHO, is a resident of full age,

of Hackberry, Cameron Parish, Louisiana, and DIAMOND M.

DRILLING COMPANY is a corporation duly authorized to

do and doing business in the State of Louisiana. ARGO-

NAUT INSURANCE COMPANY is the liability insuror of

29

DIAMOND M. DRILLING COMPANY.

2

On or about March 11, 1972, plaintiff was employed by

DIAMOND M. DRILLING COMPANY as a floorman on

DIAMOND M’s Rig No. 40, which was a drilling barge owned

by DIAMOND M. DRILLING COMPANY and which was

then located in navigable waters of the State of Louisiana.

Plaintiff's average earnings were $3.30 per hour.

3

The aforesaid drilling barge, Rig No. 40, and the M/V

Elton D, upon which plaintiff was riding when he was

injured, were vessels in navigation and in navigable waters of

the United States.

4

At all times pertinent hereto, plaintiff was working in

the course and scope of his employ:nent with DIAMOND M.

DRILLING COMPANY in connection with the operation

being conducted on and from the aforesaid Rig No. 40 and

the M/V Elton D; plaintiff had been employed on the said

vessels for some length of time and was attached to the said

vessels; at all times pertinent hereto, plaintiff was employed

as a floorman and member of the crew of the said vessels.

5

On ot about March 11, 1972, while plaintiff was work-

ing in the course and scope of his employment with DIA-

MOND M. DRILLING COMPANY, and while he was being

transported aboard a crew boat, the M/V Elton D, the crew

30

boat ran ashore.

6

As a result of this accident, plaintiff sustained an

abrading and contusing injury to his right knee, and was

treated for this injury by Dr. George P. Schneider, Ortho-

pedic Specialist of Lake Charles, Louisiana. Under the treat-

ment of Dr. Schneider, plaintiff reached his maximum re-

covery from said injury in November of 1974.

7

The accident of March 11, 1972, was caused by the

negligence of the operator of the M/V Elton D, an employee

of the DIAMOND M. DRILLING COMPANY, within the

meaning and intent of the Jones Act (46 U.S.C.A. Section

688), as amended.

8

On: February 8, 1974, plaintiff entered into a compro-

mise agreement with defendants, under the terms of which

he: settled all claims he might have as a result of injuries re-

ceived in said accident for the sum of $18,000.00.

9

At the time of said settlement, plaintiff was under the

impression that a condition of said settlement was a promise

by DIAMOND M. DRILLING COMPANY to continue him

in his employment with them. Plaintiff had reasonable

grounds upon which to base this belief.

31

CONCLUSIONS OF LAW

1

This court has jurisdiction in the premises.

2

Recovery under the Jones Act and the General Maritime

Law is the exclusive remedy of plaintiff, JOSEPH S. GUEHO,

to the exclusion of any and all remedies under the Louisiana

Workmen’s Compensation Law, LSA-R.S. 23:1021, et seq.,

or under Article 2315 of the Louisiana Civil Code, or under

the Longshoremen’s and Harbor Worker’s Compensation Act,

33 U.S.C.A. 901, et seq., or under any other laws.

3

At the time of the accident on March 11, 1972, plain-

tiff was in the course and scope of his employment with

DIAMOND M. DRILLING COMPANY, and was employed as

a floorman and a member of the crew of a vessel, and was

injured in the furtherance of his dutes as such.

4

The accident of March 11, 1972, was caused by the

negligence of the employees and agents of DIAMOND M.

DRILLING COMPANY.

5

The purported compromise settlement of February 8,

1974, is null and void, and is expressly set aside by the

court.

32

6

Plaintiff is entitled to judgment herein against DIA-

MOND M. DRILLING COMPANY and ARGONAUT INSUR-

ANCE COMPANY in the amount of $25,000.00 for damages,

wages, bonuses,maintenance and cure, and all other items of

recovery for which he might make claim.

THUS DONE AND SIGNED in Lafayette, Louisiana, on

this 4th day of April, 1975.

s/ R. J. Putnam

UNITED STATES DISTRICT

JUDGE

33

JUDGMENT

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAFAYETTE DIVISION

U.S. District Court

Western District of Louisiana

Filed: Apr 7, 1975

ROBEKT H. SHEMWELL, CLERK

By Ronald G. Weathers

Deputy

JOSEPH S. GUEHO

VERSUS CIVIL ACTION

DIAMOND M. DRILLING COMPANY NO. 74-168

and ARGONAUT INSURANCE COMPANY

JUDGMENT

This matter having come on for trial, and the court

having considered the pleadings, evidence, stipulations and

arguments of counsel, and having made findings of fact and

conclusions of law based thereon, and after due considera-

tion, being of the opinion that the law and evidence are in

favor of plaintiff;

IT IS ORDERED, ADJUDGED AND DECREED that

there be judgment herein in favor of plaintiff, JOSEPH S.

GUEHO, and against defendants, DIAMOND M. DRILLING

COMPANY and ARGONAUT INSURANCE COMPANY,

in the full sum of $25,000.00, together with legal interest

thereon from entry of judgment, 1975, until paid.

34

IT IS FURTHER ORDERED, ADJUDGED AND

DECREED that defendants pay all taxable costs in these

proceedings.

JUDGMENT READ, RENDERED and SIGNED at

Lafayette, Louisiana, on this 4th day cf April, 1975.

s/ R. J. Putnam

UNITED STATES DISTRICT

JUDGE