On January 20, 1962, three workmen, Roy Dacus, Patrick Kenny and Ralph Moracco, were drowned in Seneca Lake when the vessel on which they were working sank. Their widows received compensation awards from the decedents' employer, defendant Spiniello & Nesto Corp. They also brought the present action, claiming negligence and unseaworthiness of the vessel, against several defendants who allegedly "owned, controlled and/or managed" the boat and, later, against the employer. The question in suit is whether the compensation awards resulted in a waiver of "admiralty or interstate commerce rights and remedies" under section 113 of the Workmen's
Plaintiff widows filed their claims for compensation between April and August, 1962. The only issue was that of dependency, and the maritime rights of the parties were not discussed except that, upon the hearing, the claimants all testified that "there is a third party action pending". The board made "a decision and award of compensation" in each case, two in July and one in September, 1962. Each decision contained a notation to the effect that the case was "continued one year pending disposition of estate's third party action." Payments have continued since that time, except for the sole dependent of Patrick Kenny, who died in 1965.
On September 17, 1962, the plaintiffs formally notified their employer, Spiniello & Nesto Corp., that they had commenced an action in the Supreme Court, New York County, against two other Spiniello companies, the two individual Spiniello brothers and a fifth party. It was not until November 12, 1963 that they named Spiniello & Nesto Corp. as a party defendant in that action. They sought damages of $350,000 alleging, as noted, that the defendants had been negligent and adding that the boat was unseaworthy.
There is a sharp conflict concerning facts which have an important bearing on the issue of waiver. The matter is further complicated by the circumstance that it now appears, according to the plaintiffs, that the Spiniello companies are all "interrelated," operated "out of one office" and are "substantially controlled by the defendant, V. James Spiniello." Although it is true that the plaintiffs did not indicate, in their notice of commencement of a third-party action, that they intended to sue the employer, it is not at all clear from the record that that defendant owned the boat or, if it did, that the plaintiffs were aware of such fact.
Defendants Spiniello & Nesto Corp., Spiniello Construction Co. and the two individual Spiniello brothers sought dismissal
We agree with Special Term that the motion should be denied since, in our view, too, the papers demonstrate that a question of fact exists as to whether there was a waiver.
Although an unqualified acceptance of compensation payments over a period of years may constitute a waiver of Federal rights and remedies (see, e.g., Matter of Braadt v. City of New York, 15 N.Y.2d 875; Matter of Meachem v. New York Cent. R. R. Co., 8 N.Y.2d 293; Matter of Ahern v. South Buffalo Ry. Co., 303 N.Y. 545, affd. sub nom. South Buffalo Ry. Co. v. Ahern, 344 U.S. 367, supra; cf. Heagney v. Brooklyn Eastern Dist. Term., 190 F.2d 976, cert. den. 342 U.S. 920
In the case before us, the record does not establish that the payment and acceptance of compensation constituted an unequivocal waiver by the parties of their Federal rights. Although the plaintiffs may not have indicated that it was a Federal remedy they were pursuing, they could not have made it plainer to defendant employer — and this within a few months of the accident and before an award was made — that they were ultimately relying not upon workmen's compensation to redress their losses but upon an action for damages. According to the plaintiffs, the ownership of the boat was at that time in some doubt. Obviously, Spiniello & Nesto Corp. must have known the facts and been aware, as well, that, of necessity, either the corporation itself or one of its interrelated corporations was the ultimate target of the plaintiffs' so-called "third party" suit. Thus, the situation is far different from one in which the employee claims and accepts compensation without alerting his employer to the possibility of litigation in the courts.
The order appealed from should be reversed and orders of the Supreme Court, New York County, reinstated, with costs in this court and in the Appellate Division, in accordance with the opinion herein.
Order reversed, etc.