Ellerman Lines, Ltd. v. Atlantic & Gulf Stevedores, Inc., 14830.

• Citation: 339 F.2d 673
• Decision Date: 11 December 1964
• Docket Number: No. 14830.,14830.
• Court: U.S. Court of Appeals — Third Circuit
• Parties: ELLERMAN LINES, LTD., Appellant, v. ATLANTIC & GULF STEVEDORES, INC.

339 F.2d 673 (1964)

ELLERMAN LINES, LTD., Appellant, v. ATLANTIC & GULF STEVEDORES, INC.

No. 14830.

United States Court of Appeals Third Circuit.

Argued September 24, 1964.

Decided December 11, 1964.

Rehearing Denied January 22, 1965.

Mark D. Alspach, Krusen, Evans & Byrne, Philadelphia, Pa., (Joseph P. Green, Krusen, Evans & Byrne, Philadelphia, Pa., on the brief), for appellant.

Francis E. Marshall, Philadelphia, Pa. (Sydney C. Orlofsky, Philadelphia, Pa., on the brief), for appellee.

Before HASTIE and FORMAN, Circuit Judges, and KIRKPATRICK, District Judge.

HASTIE, Circuit Judge.

The district court dismissed as premature a libel by Ellerman Lines, a shipowner, against Atlantic & Gulf Stevedores claiming indemnity "for all sums which it has been compelled to pay and to incur and for such additional sums as it may be required to pay hereafter" in connection with a suit, then and now pending in that court, by Nathan Eckles, a longshoreman employed by Atlantic & Gulf, against Ellerman for personal injury suffered during the stevedoring of Ellerman's ship.

The libel alleged that, pursuant to a contract between the parties, Atlantic & Gulf had undertaken to stevedore Ellerman's vessel in a competent and workmanlike manner, but had failed to do so, and thereby had caused the injuries for which Eckles had sued Ellerman. The libellant also asserted that it "has been compelled to expend money in the nature of investigation expenses and has incurred additional expenses in the nature of counsel fees", will have to incur further expenses and may have to pay a judgment in favor of Eckles. Ellerman supported its libel with an affidavit showing that it had spent $283.29 for costs and other legal expenses. The court below reasoned that such a suit as this cannot be instituted and maintained until the injured longshoreman shall recover against the shipowner in circumstances which provide a legal basis for recovery over against the stevedoring company.

We observe at the outset that Ellerman, by instituting this separate proceeding in admiralty, has deliberately avoided the familiar procedure of impleading the stevedoring company as a third-party defendant in a longshoreman's civil action against the shipowner.¹ In the course of argument, libellant's proctor, with commendable candor, asserted that this was done because of apprehension, based upon experience, that a jury in the civil case would make a less competent and adequate determination of fair counsel fees as an item of indemnification than would a judge considering the same claim in admiralty. We must decide whether this tactical maneuver was lawful and timely.

The libel alleges a promise, whether express or implied,² by the respondent to stevedore a vessel in a competent and workmanlike manner, a breach of that promise and consequent damage to the promisee. The alleged breach of the promise to render workmanlike service necessarily occurred no later than the time of Eckles' injury. Therefore, in relation to the alleged breach of duty this libel cannot have been premature. See Unexcelled Chemical Corp. v. United States, 1953, 345 U.S. 59, 65, 73 S.Ct. 580, 97 L.Ed. 821. True, the scope of the respondent's undertaking and the manner of its performance are essential elements of libellant's case and have not been adjudicated. But these are matters for subsequent proof under the adequate allegations of the libel.

The other essential element of the claim is damage caused by respondent's breach of warranty of workmanlike service. In the view of the court below, Ellerman might suffer such damage, including expenses of litigation, when Eckles should recover against it, Brown v. San Alberto Cia Armadora, S. A., 3d Cir. 1962, 305 F.2d 602, but not until then. We disagree. If conduct of Atlantic & Gulf in violation of its warranty to Ellerman was the sole responsible cause of Eckles' injury, as the libel alleges, the expense to which Ellerman is subjected in defending Eckles' suit against it to recover for that injury is an element of damage caused by the respondent's breach of warranty, even if Ellerman succeeds in defeating Eckles' claim. Guarracino v. Luckenbach S.S. Co., 2d Cir. 1964, 333 F.2d 646; Massa v. C. A. Venezuelan Navigacion, 2d Cir. 1964, 332 F.2d 779; Strachan Shipping Co. v. Koninklyke Nederlandsche S.M., N.V., 5th Cir. 1963, 324 F.2d 746, cert. denied 376 U.S. 954, 84 S.Ct. 969, 11 L. Ed.2d 972. Cf. Damanti v. A/S Inger, 2d Cir. 1963, 314 F.2d 395, cert. denied 375 U.S. 834, 84 S.Ct. 46, 11 L.Ed.2d 64. Since Ellerman instituted this libel after it had made necessary out of pocket expenses and incurred obligations for legal services in defending Eckles' suit against it,³ Ellerman is presently entitled to some recovery if it can prove the allegations of its libel.⁴ Accordingly, we conclude that the district court was mistaken in ruling that this proceeding was premature.

An additional exceptive allegation by the respondent, that the claim for indemnity is not within admiralty jurisdiction, is without...