John Tatum v. Axxis Drilling, Inc.
Plaintiff, John Tatum, moved for a declaratory judgment seeking a declaration that a purported release and receipt signed by Tatum to be null and void pursuant to the Declaratory Judgment Act. Defendant, Axxis, moved for Summary Judgment seeking dismissal of Tatum's claim by declaring Release is valid and enforceable.
This action arose out of an injury allegedly sustained by Tatum while he was working aboard a drilling barge owned and operated by Axxis. Tatum slipped on a hazardous substance, known as "deck wash" while exiting onto a deck of the barge from the stairs. Tatum alleged to have suffered severe and disabling injuries as a result of the slip and fall.
Tatum was then sent to an Axxis company doctor, who examined Tatum and advised him to continue working full duty but to avoid squatting, kneeling and climbing. Tatum was prescribed anti-inflammatory medication and Tatum then returned to work for the last day of his shift, assigned to folding laundry.
Seven days later, Tatum attempted to board the ship and return to work but was told to go home and heal. Tatum was summoned to an Axxis office where he was met with an attorney, representing Axxis. Tatum executed a Receipt and Release of his rights regarding his accident, 15 days prior, and received a check in the amount of $1,669.
Tatum claimed that he did not fully understand the consequences of executing the agreement and in response Axxis contended that the release is valid and enforceable, effectively preventing claims asserted by Tatum in connection with his accident.
Did this Court find that the Release signed by Tatum was valid and enforceable?
Both parties agreed that the burden of proving the validity of a release is placed on the proponent of the release who must prove the release was executed freely without deception or coercion and that it was made by the seaman with full understanding of his rights. Therefore, the burden is upon Axxis for proving the validity of the release.
Axxis must show, in this motion for summary judgment, that there is no genuine issue of material fact exists.
Here, Tatum did not know he was meeting with an Axxis attorney when he was called to an office, and therefore did not have an opportunity to obtain counsel. He was also told by Axxis's attorney that if he obtained legal counsel, Axxis would no longer be able to talk to him. Therefore, Tatum, claiming a 9th grade education argued he was left with the impression no deal would be available if he sought legal advice.
Moreover, Tatum reasonably believed he would lose his job if he chose to hire an attorney.
Moreover, it did not appear Tatum and Axxis negotiated at arm's length and in good faith. Tatum was not told why he was reporting to Axxis's offices before he reported therefore, the possibility of obtaining counsel, and was not given any time to consider the offer. Tatum was also not told he could return to work while considering the offer.
Finally, the Court found that there was the appearance of coercion and that there was a grossly inadequacy of consideration.
Accordingly, this Court found that the release signed by Tatum was not valid and unenforceable.
In determining whether a release is valid, the Courts examine factors to determine whether the injured seaman understood the nature of his rights and consequences of release.
These factors are (1) Whether he/she was given the opportunity to obtain outside counsel (2) Whether the parties negotiated at an arm's length (3) Whether there was an apprehension of coercion or fraud and (4) The adequacy of consideration.
While each factor is not determinative, the Courts balance them to determine whether the agreement(s) are valid.
Steve Gordon
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