Sunday, May 18, 2014

Kossick v. United Fruit Co. case brief summary

Kossick v. United Fruit Co. (1961)
                      Petitioner was employed as chief steward on vessel of United Fruit and suffered thyroid ailment
                      Employer wanted petitioner to go to US Public Heath Service Hospital, but respondent wished to be treated by a private physician
                      Ended up going to Public health and received improper treatment and sued respondent for $250,000 for bodily injury
                      Issue:              What is the interplay b/t state and maritime law?
                      Contract for employment was a maritime contract
                      What was the subject matter of the contract? Seaman giving up a right guaranteed him by the maritime law whether he was right in his criticism in the hospitals or not and the contract sprang from the maritime contract of employment
                      This alleged oral contract sprang from a maritime relationship
                      This is a maritime contract b/c it concerns seaman, which concern vessels, concerns the assertions of the rights under the maritime maintenance and cure

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  • Kossich v. United Fruit Co.
    • Petitioner, while employed as chief steward on one of the vessels of respondent, United Fruit, suffered a thyroid ailment, not attributable to any fault of the respondent, but still had a right to maintenance and cure
    • Petitioner wished to be treated by a private physician rather than one of the US Public Service Hospitals intended for seaman
      • However, respondent refused to pay for private treatment so Petitioner finally underwent treatment at the Public Hospital; petitioner claimed that employer orally agreed to pay damages for any malpractice that would occur at the public hospital
      • Petitioner alleging that due to the improper treatment at the Public Hospital, which he felt would not have occurred at a private physician, he suffered grievous unwonted bodily injury
    • Court brought the case in because it presented novel questions as to the interplay of state and maritime law on the question of the validity of the oral contract between the employer and the employee (the contract for employment is clearly maritime but that is not at issue here, rather the contract regarding the employees agreement to go to public hospital)
      • If state law, the contract would be invalid as an oral contract under NY Statute of Fraud laws
      • If maritime law, the contract would be valid as an oral contract
    • Court next considered the subject matter of the oral contract and concluded that the contract sprang from the maritime contract of employment and the subject matter of the contract was the seaman himself and his rights under maritime law to maintenance and cure
      • Remember, the locality of the perfection of the contract is not US law – it does not matter that the contract here was agreed to on land and was to be performed on land – U.S. maritime law, unlike English, is only concerned with the subject matter and nature of the contract
    • Therefore, maritime law was to be applied and the oral contract would be binding
  • Mixed contracts –the general rule is that a contract will not be within the admiralty jurisdiction unless it is wholly maritime in subject matter and nature
    • Exceptions – if maritime and non-maritime elements are separable, admiralty courts will exercise jurisdiction over the maritime portion
      • Or if the non-maritime portion of a contract is simply incidental
  • Sales – contract payment made to charter a vessel is maritime, but the sale of a vessel itself is not
    • Example: a lease which runs for six months to charter the vessel and the charterer has the right to purchase the vessel at the end of the six months for the amount paid to charter it. If the charterer exercises the right to purchase but the lessor refuses, a court would likely hold that the two parts of the contract are separable.  Therefore, the option to purchase contract is not maritime by rule
    • Courts try to determine which agreement is dominant – beware of a disguised sale

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