Fifth Circuit Court of Appeals Boldly Goes Where No Court Has Gone Before on the Issue of a Seaman’s Maintenance Rate Including Seaman’s Full Mortgage Expense
In HALL and STUART v NOBLE DRILLING (U.S.)INC.; NOBLE DRILLING SERVICES, INC., 2001 U.S. App. LEXIS 2149 (C.A. 5th Circuit) February 14, 2001, a landmark appellate decision was handed down on the issue of maintenance including a seaman’s full mortgage payment.
Both Hall and Stuart worked on offshore rigs when they were injured. Suits were filed which included claims for maintenance. The cases were consolidated for a trial on the issue of the daily maintenance rate. Maintenance is money that an injured seaman receives for food and shelter until the point of maximum medical improvement is declared.
Both Hall and Stuart lived with their families and both were obligated to pay the full mortgages for their houses. The shipping companies argued that the mortgage payments should be prorated with the other family members and only that portion applying to the seaman included in the maintenance rate. The appellate court rejected this position and reasoned that would result in a seaman who lived alone in a large home getting one hundred percent of his mortgage but that a seaman who lived with family in a small home and for whom prorating was applied receiving much less even though the smaller home had a much smaller mortgage than the larger home.
Also the appellate court indicated that prorating would cause problems if a new child was born or part of the family moved out. Different prorating would have to be done based on the number of people in the house, which would add to the difficulty in establishing a daily maintenance rate.
The appellate court noted that if the full mortgage payment were not paid the seaman would lose his house.
The court in defining lodging stated. “Lodging” includes expenses “necessary to the provision of habitable housing,” such as heat, electricity, home insurance, and real estate taxes…. Other expenses, such as telephone service, clothing, toiletries, and travel, are not part of maintenance.”
Therefore the maintenance rate could include some other items besides the mortgage payment.
The court noted that prorating might be appropriate in the following circumstances:
“Costs of heat, electricity, and water, to the extent such expenses vary with the number of people in the household, can be prorated. But to the extent that additional family members do not increase a seaman’ s expenses, proration would not be appropriate. For example, the costs of heating a home may be lower when more people occupy the same space.”
All in all, this is a very good decision for seaman. Unfortunately it does not apply in those circumstances where there is a union and a collective bargaining agreement. These collective bargaining agreements typically limit maintenance to $8 a day. This is a totally unreasonable amount of money and is carried over from rates that were agreed to in the 1950’s.
Injured seaman should gather up their housing expenses including mortgage payments, electricity, water, gas, insurance, property taxes and submit them to their employer. The employers should look into whether or not these expenses are increased to the presence of other family members.