American Export Lines v. Norfolk Shipbuilding & Dry. Corp.

• Decision Date: 20 August 1964
• Docket Number: No. 9364.,9364.
• Citation: 336 F.2d 525
• Parties: AMERICAN EXPORT LINES, Owner pro hac vice of the S.S. EXMOUTH, Appellee, v. NORFOLK SHIPBUILDING & DRYDOCK CORPORATION, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

336 F.2d 525 (1964)

AMERICAN EXPORT LINES, Owner pro hac vice of the S.S. EXMOUTH, Appellee, v. NORFOLK SHIPBUILDING & DRYDOCK CORPORATION, Appellant.

No. 9364.

United States Court of Appeals Fourth Circuit.

Argued June 23, 1964.

Decided August 20, 1964.

L. S. Parsons, Jr., Norfolk, Va. (Parsons, Stant & Parsons, Norfolk, Va., on brief), for appellant.

Harry E. McCoy, Norfolk, Va. (Seawell, McCoy, Winston & Dalton, Norfolk, Va., on brief), for appellee.

Before SOBELOFF, Chief Judge, HAYNSWORTH, Circuit Judge, and HEMPHILL, District Judge.

SOBELOFF, Chief Judge.

This litigation began when Herbert J. Bielawski, an employee of Norfolk Shipbuilding & Drydock Corporation, sued American Export Lines, the owner pro hac vice of SS EXMOUTH, for injuries sustained aboard that vessel. The ship requested the shipyard to defend the suit, but the latter declined to do so. The ship then filed a third-party complaint. After the jury absolved the ship of all liability and held the shipyard solely responsible for Bielawski's injuries, the ship sought indemnity from the yard for legal expenses incurred in the successful defense of the suit. It is from the District Court's award of indemnity that the shipyard now appeals.

Bielawski's complaint alleged that American Export "managed, operated and controlled" the vessel at all material times, that Bielawski was employed by Norfolk "in the capacity of a rigger in connection with certain work being undertaken upon said vessel on navigable waters" and that "in the usual course of business he was working on the ship's forward mast house guiding a certain cargo boom to its cradle when he was struck in the back and was catapulted into the vessel's No. 2 hold, thereby receiving extensive, permanent and painful injuries." The complaint charged that American Export was liable because of negligence or because of the unseaworthiness of the vessel. The ship owner's answer denied negligence and claimed that the SS EXMOUTH was a "dead ship" and therefore not subject to the warranty of seaworthiness. Because the jury found the shipyard solely responsible, it never decided the "dead ship" question.

It is now settled that when a stevedore enters into a service agreement with a ship, there is an implied contractual warranty on the part of the stevedore to perform in a workmanlike manner. Italia Soc. v. Oregon Stevedoring Co., 376 U.S. 315, 84 S.Ct. 748, 11 L. Ed.2d 732 (1964); Weyerhaeuser S.S. Co. v. Nacirema Co., 355 U.S. 563, 78 S. Ct. 438, 2 L.Ed.2d 491 (1958); Ryan Stevedoring Co. v. Pan-Atlantic Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956). While there is no direct authority holding the same warranty applicable in a shipyard-ship contract there is no sound reason to say that it is not. Cf. West v. United States, 361 U.S. 118, 80 S. Ct. 189, 4 L.Ed.2d 161 (1959). Especially is this so in the present case where the Invitation to Bid expressly required the shipyard "to carry out all work specified herein in a thoroughly efficient manner, and to the entire satisfaction of the representatives for the American Export Lines and the United States Maritime Administration." (Emphasis added.)

When a stevedore's breach of warranty imposes liability upon the ship, the ship is entitled to indemnity from the stevedore for losses, and the right to indemnity includes expenses of litigation. Nicroli v. Den Norske Afrika, 332 F.2d 651 (2nd Cir. 1964). An actual judgment of liability however is not required. Paliaga v. Luckenbach Steamship Co., 301 F.2d 403 (2nd Cir. 1962). Thus, if a ship reasonably settles a longshoreman's suit, it still has a right to indemnity from the stevedore. This court has stated the indemnity rule in ship cases as follows:

"If a shipowner can show that the stevedore\'s breach of warranty has occasioned it expense, reimbursement is due. Of course, the shipowner must prove that the stevedore, in fact, breached its warranty and caused injury for which the shipowner was potentially liable and that the expenses incurred in defense are reasonable." Rederi A/B Dalen v. Maher, 303 F.2d 565, 567 (4th Cir. 1962).

The jury having found the shipyard solely at fault for Bielawski's injuries, it is clear that American Export has sustained its burden to prove the shipyard's breach of warranty. It is equally clear that the expenses incurred by the ship in defense of the suit were occasioned by this breach. The only question then is whether the shipyard's breach exposed the ship to "potential" liability.

The shipyard contends that it...