Bass v. Phoenix Seadrill/

78, LTD. 749 F.2d 1154 (5th Cir. 1985)

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Nature of the Case

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Facts

P sought compensation from three defendants for personal injuries suffered while performing seaman's duties aboard a newly commissioned Jones Act vessel. P was employed by D as a roughneck. Contractors hired by D completed the construction of a rig known as the Big Foot I in early 1980. Branham Industries, Inc. (Branham) designed and fabricated the rig's derrick; Crown Rig Building Services, Inc. (Crown Rig) erected the derrick. D's crew commenced drilling operations aboard the rig in the Gulf of Mexico. On May 8, 1980, after only five days of drilling, P suffered severe injuries when a forty-pound jack handle fell from a work platform eighty feet above the rig's floor and struck him on the head. The jack handle, which was used to raise and lower the work platform (known as a 'monkey board'), pivoted on a steel pin to which it was supposed to be attached by a cotter key. The cotter key was not located after the accident. P sought compensation from D under the Jones Act and the general maritime law. D brought third-party actions for indemnity against Branham and Crown Rig. P amended his original complaint to assert negligence and strict liability claims directly against Branham and Crown Rig. P compromised his claims against D in a settlement that the parties and the district court labeled a 'Mary Carter' agreement. For $210,000, P forever released D. P assigned to D up to $178,000 of any funds recovered from Branham and Crown Rig. P agreed not to settle his claims against third parties without the consent of D. P and D disclosed their agreement to the court and opposing counsel six months before trial. On the first day of trial, Crown Rig and Branham moved the court to void the settlement agreement on the grounds that it 'is against public policy, abuses the judicial form and processes, and fosters champerty and maintenance.' In a post-trial memorandum opinion, the court awarded P $650,000 in damages apportioned, as follows, according to the comparative fault of the defendants: D -- 40 percent; Branham -- 40 percent; and Crown Rig -- 20 percent. The court ruled on the motion to void the settlement. It abrogated the rebate and veto provisions of the agreement because of grossly inadequate consideration and a perceived deterrent effect on compromise with the non-settling defendants; the court found, that, absent the rebate and veto provisions, the agreement was supported by ample consideration. the court enforced the agreement as a straight cash-for-release settlement and entered judgment that P recover $260,000 from Branham and $130,000 from Crown Rig. The release provisions of the settlement agreement, in the court's view, discharged D's liability for the remaining $260,000 of P's damages. Ds appealed.