Originally published by Devin C. Reid and Alexander J. Baynham.
In DePerrodil v. Bozovic Marine, Inc., No. 16-30009, 2016 WL 6810728, at *1 (5th Cir. Nov. 17, 2016), a panel of the United States Court of Appeals for the Fifth Circuit recently limited the effect of the collateral source rule in a maritime employee’s personal injury action against a non-employer. DePerrodil held that the collateral source rule allows a plaintiff, in a maritime personal injury action against a third party, to recover only the amount of medical expenses paid by the plaintiff’s employer’s Longshore and Harbor Workers’ Compensation Act (“LHWCA”) insurer. In other words, the plaintiff could not recover the portion of the medical expenses billed that were “written off” by the insurer’s negotiated discount with medical providers.
Plaintiff, Robert dePerrodil, was a 70-year-old oilfield consultant who worked for Petroleum Engineers, Inc. (“PEI”). Id. PEI chartered a crew boat owned and operated by Bozovic Marine, Inc., to take dePerrodil from Venice, Louisiana to his work site on an offshore platform. Id. Upon arriving at the platform, dePerrodil was unable to board the platform because no liftboat was present, so he asked Captain Bozovic to return to port. Id. While returning to port, the vessel encountered eight-to-ten foot waves, and dePerrodil fell to the floor and suffered injuries to his back. Id.
DePerrodil subsequently received LHWCA benefits from his employer and brought suit against Bozovic Marine, Inc. DePerrodil’s medical providers billed the insurer $186,080.30 but $128,694.80 was written-off as part of the insurer’s negotiated rates with the medical providers. Id. at *5. In the end, the insurer paid $57,385.50 for dePerrodil’s medical expenses. Id. at *1. After a bench trial on the merits, the court awarded the full amount of the medical expenses billed, rather than the amount paid by the insurer. Id. at *1. In so ruling, the court held that the collateral source rule barred any discount of the medical expenses PEI and its insurer were billed, but not required to pay. Id. Bozovic appealed the district court’s ruling.
On appeal, the United States Court of Appeals for the Fifth Circuit asked “whether the collateral-source rule allows [a] plaintiff to recover the unpaid, written-off portion of his billed medical expenses, when the remaining, paid portion of the billed expenses was through workers’ compensation insurance provided by his non-tortfeasor employer, pursuant to the Longshore and Harbor Workers’ Compensation Act (LHWCA).” Id. The Court noted that “[t]here is no direct authority regarding the treatment of written-off LHWCA medical expenses in the maritime-tort context.” Id. at *5. As a result, the Court looked to rules established for a seaman’s cure obligation – a seaman may only recover the amounts actual paid. Id. at *6. The diPerrodil panel noted that “maritime cure and LHWCA insurance create similar obligations for employers.” Id. at *6. Both cure and the LHWCA require “an employer to pay work-related medical expenses, regardless of ‘fault or negligence . . . .’” Id. In fact, the LHWCA’s intent was to cover those maritime workers who “do not necessarily qualify for maritime maintenance and cure because a significant portion of their work is done on shore.” Id. The panel, therefore, held that the rule of cure applied here: “LHWCA medical-expense payments are collateral to a third-party tortfeasor only to the extent paid; in other words, under those circumstances, plaintiff may not recover for expenses billed, but not paid.” Id. The holding of dePerrodil is a substantial clarification of the law in favor of maritime defendants.
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