Petition for Rehearing En Banc Denied June 5, 1961.
BAZELON, Circuit Judge.
An employer and its insurance carrier brought this suit against the Deputy Commissioner to set aside a compensation order directing payment of benefits to the dependents of two musicians fatally wounded by two disgruntled customers, who returned to the employer's premises after having been ejected. The amended complaint challenged only three of the defendant's findings: (1) that the deceased persons were employees and not independent contractors, (2) that the mother of one of the deceased was a dependent, and (3) that the award is based upon a properly determined wage rate.
We agree with the District Court that the record supports the findings of the Deputy Commissioner challenged in the complaint. But we think that the court erred in considering the issue which it raised, sua sponte.
In the formal pleadings and pre-hearing procedures before the Deputy Commissioner, the employer and its carrier denied, inter alia, the allegation that the of employment. But at the hearing, in response to the Deputy Commissioner's effort to fix the issues for contest, counsel homicides arose out of and in the course specifically limited its denials to the allegations of employer-employee relationship, wages and dependency.
In concluding that the employer and its carrier withdrew their pre-hearing denial of the allegation that the homicides arose out of and in the course of employment, we are fortified by the failure of their complaint herein to challenge the action of the Deputy Commissioner in sustaining that allegation.
Reversed and remanded for further proceedings in accordance with this opinion.
BASTIAN, Circuit Judge (dissenting).
I would affirm the judgment of the District Court on the very able opinion of Judge Holtzoff.
In the answer of the employer to the employees' claim for compensation, the following appears:
In the Notice to the Deputy Commissioner that Claim Will be Controverted, the following appears:
In the Notice of Hearing, it appears that the hearing was set "for consideration of: Injury arising out of and in the course of employment [and other defenses not here important]."
When the case came before him, the Deputy Commissioner asked appellees' counsel: "What are the grounds of controversion?" Counsel replied:
Throughout the hearings before the Deputy Commissioner, testimony pro and con was received pertinent to the seriously disputed issue (among others) as to whether the homicides arose out of and in the course of employment; and that issue was in fact resolved by the finding of the Deputy Commissioner. I can not agree that it is "abundantly clear that at the hearing before the Deputy Commissioner counsel did not contest the allegation that the homicides arose out of and in the course of the employment."
In the amended complaint, which is commented on by the majority, appellees, after setting forth certain specific objections, alleged as follows:
One of the Deputy Commissioner's specific findings was "[t]hat the injury arose out of and in the course of the employment."
I think it unfortunate that in compensation cases such a strict view of the issues should be taken as appears in the majority opinion.
For the above reasons, I would affirm the judgment of the District Court.
"There was no relationship of employer-employee before or at the time of the occurrence. We controvert the claim for earnings; we controvert the dependency claim of the mother; and we are controverting until shown any evidence, any medical expenses.
"Basically, without specifying it, we are resisting the claim in every particular except such particulars as we will later stipulate to, but generally, it is the contention of the respondents that there was no relationship of employer-employee at all insofar as the management of the Jo-Del Restaurant and the musicians were concerned and, of course, basically the dependency of the mother. * * *"
With respect to the other claim, counsel subsequently stated:
"The overall grounds of the controversy are that there was no employer-employee relationship. Specifically, we deny that relationship and we deny the claimed earnings. That is the extent of our denials in that case."
Read as a whole, it is abundantly clear that at the hearing before the Deputy Commissioner counsel did not contest the allegation that the homicides arose out of and in the course of employment.